Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Horticulture

[Relevant documents: The Fourth Report from the Agriculture Committee of Session 1994–95, on Horticulture (House of Commons Paper No. 61–1 and -II), and the Government Reply thereto contained in the Fourth Special Report of Session 1994–95 (House of Commons Paper No. 778).]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

Sir Jerry Wiggin: The Agriculture Committee is deeply honoured to be the first Committee to take advantage of the new procedure, which you, Madam Speaker, kindly approved, to allow Select Committees more time to debate their reports. All of us on Select Committees agree that the former arrangements were totally unsatisfactory, particularly when hon. Members and people outside the House give up so much of their time to give evidence to our Committees, and it is a tragedy that we do not have more time to debate them. This is only the third debate that the Agriculture Committee has had in the past seven years.
We published our report on horticulture last August, and it shows that, despite the problems that the horticulture industry faces in the United Kingdom and the relatively low common agricultural policy support that it receives, horticultural holdings in the United Kingdom employ almost 10 per cent. of the agricultural labour force. Some 60,000 people, including farmers and their wives, work on holdings where horticulture accounts for more than two thirds of the total standard gross margin, and that figure does not include the substantial number of seasonal and casual workers who are employed at harvest and other busy periods. Nor does it account for those who work further up the food supply chain and those who work in the ancillary sectors.
We were left in no doubt that, in some parts of the United Kingdom, horticulture plays a role in the local economy that is much understated by mere employment statistics, and it is fair to say that the substantial attendance at what, for Parliament, is an early hour to debate what appears on the face of it a somewhat dry subject demonstrates that hon. Members recognise the importance of the industry to their constituencies. We held our inquiry at a time when the fortunes of some sectors of the UK horticulture industry were, and, I am afraid, still are, at a low ebb. A snapshot of the industry when we made our inquiry shows the problems that it faces. There has been an on-going, long-term decline in horticultural production in the United Kingdom; the value

of output has been falling; and horticulture's share of total agricultural output has also declined. Despite rising output per hectare, due largely to technological advances, incomes have also been in decline.
In addition, and perhaps amazingly, the United Kingdom runs a substantial and growing trade deficit in fruit and vegetables, which in 1993 reached £2,818 million. Even when produce that cannot be grown in the UK is discounted, there is still a substantial trade gap, and all that despite the fact that per capita consumption of fruit and vegetables in the UK is among the lowest in the European Union and is less than half the amount consumed in some of the southern member states.
We paid some visits during the inquiry, and in Almeria, southern Spain, we were astounded by the results of a latter-day "gold rush", where what was once a wilderness has been transformed into a highly productive and low-cost nursery, with not just acres or hectares but what seemed to be square mile after square mile of plastic sheeting spread along the coastline. Those vast, cheap, makeshift greenhouses, with the aid of irrigation water from the aquifers beneath, produced peppers, tomatoes, cucumbers and numerous other salad crops, all of which are transported throughout the European Union.
In Holland, we saw similar crops being grown in more elaborate and expensive systems under glass, but we should bear in mind the favourable arrangements that the Dutch created for themselves to supply gas to heat those greenhouses. Although the Dutch, like many producers in the UK, fear Spain's low-cost producers, the Spanish are concerned that there may be increasing penetration of their markets by even lower-cost producers from Morocco.
Little can be done about the climatic advantages for the salad crop producers whom we visited in Spain, although it is clear that Almeria is an environmental eyesore that would not be allowed in the UK. Nor can UK apple growers expect to benefit from the growing conditions prevalent in South Africa and other southern hemisphere countries. Even so, the UK could benefit from many aspects of the horticultural sectors that we saw in Spain, Holland and South Africa, not the least of which was the organisation of their marketing systems.
The UK has the most developed retailing systems in Europe and probably the world. The major multiples are taking a larger and larger share of the retail market, and their central purchasing and distribution systems give importers relatively easy access to outlets capable of handling large volumes of produce. It would be wrong to assume that the supermarkets are the only outlet for produce—others include independent retailers, market traders and the catering sector—but the major retailers are the potent force in the market, eager to give their customers a variety of fresh fruit and vegetables at a competitive price.
It was frustrating to hear supermarket buyers speaking of the ease with which they could purchase produce from an importing nation's growers, frequently by dealing with a single point of contact. That, we were told, is not the case with the sales of UK produce, whether it be for the domestic market or for export.

Mr. David Harris: Does my hon. Friend accept that that might be the general picture, but that, in a region such as west Cornwall, local growers are


making strenuous efforts, through co-operatives and marketing organisations, to produce exactly what the supermarkets want? The number of new pack houses that have opened in the past couple of years is testimony to that enterprise. Should not their example be followed in other parts of the country?

Sir Jerry Wiggin: Needless to say, I agree with my hon. Friend. The supermarket buyer who wants to buy 10 tonnes of a product can lift a telephone and be sure of getting the quality and quantity that he wants from many of those foreign countries' marketing agents. Unfortunately, despite the efforts of the British industry, large gaps still exist in our marketing system, which have been obvious for many years. Having been a farmer and worked among horticultural growers, I know that they are, by their very nature, an independent bunch. It is extremely difficult to get people to co-operate in this country. There must be a sacrifice, but when it comes to it, too often people pull out. They will not take the strain when things are difficult.
During our inquiry, we received numerous suggestions as to how the UK industry's performance could be further improved at home and abroad. In particular, we were eager to ensure that Ministers argued strongly for reforms to the European Union's fruit and vegetable regime which would not disadvantage UK producers. Other changes, however, are needed in the horticultural sector, as the Committee report's conclusion and recommendations show.
Not the least of the problems that we identified was the lack of reliable statistical information on the UK's horticultural sector. We asked the Government to discuss with the industry the means by which information can be collated and disseminated, and pointed out the need for the Government to encourage the European Commission to ensure that similar information on the horticulture industry throughout the EU is available. The Government accepted those recommendations and we should be grateful for further information on their implementation.
Of course, any industry requires skilled people to work in it and, although much can be learnt through training while in employment, it is also important that people entering the industry have access to suitable courses. The Committee asked the Government to keep a weather eye on that, to keep local education authorities aware of the need to maintain funding for discretionary grants in that sector at appropriate levels, and to consult employers in the industry on the most suitable content of courses. That recommendation was also accepted by the Government. We made it because, in these days of stringency in education, we found that it was easy for such authorities to drop horticultural courses from their syllabuses. We wish to put up a marker that that will be damaging for the industry in the long term.
The Committee recommended that the Ministry of Agriculture, Fisheries and Food should take a lead in exploring ways by which the wholesale marketing system, which faces many difficulties and a declining market share, can be rationalised. During our inquiry, it became obvious that an increasing number of retailers and producers are trading directly with each other. The Committee welcomed the new producer contracts that were being introduced by Tesco, which gave its suppliers

greater security. We recommend such initiatives to all producers and retailers in the hope that it will help to stem the growing tide of imported produce.
We also hope that retailers will realise that they will benefit from working with producers in funding near-market research, thus helping to ensure that UK customers are able to buy the type of produce that they wish from UK producers.
We were also concerned that the UK was not performing well in export markets. We urge the Government to investigate ways by which producers could be encouraged to explore and exploit the opportunities presented by the single market for their produce. We were pleased that, following our report, MAFF appointed a horticultural export promoter, seconded from industry, and to hear news of the establishment of the Horticultural Export Bureau. That bureau appears to be a direct response to our recommendation that horticultural exporters should establish a representative organisation to co-ordinate export strategies. We still, however, hold the view expressed in our report that the redirection of Food From Britain's role away from import substitution was misconceived: for fruit and vegetables, import substitution will be by far the most effective way to reduce the trade deficit.
On the fruit and vegetable regime, although in 1996 the cost of support for both fresh and processed regimes will amount to only less than 4 per cent. of the total common agricultural policy budget, it will still amount to about £1,252 million. What is more, much of the expenditure is to "withdraw" produce that is not wanted by the market. Many producers in southern Europe grow their crops solely for withdrawal. Withering criticism of the regime is contained in the 1994 European Union Court of Auditors report, which described systems for inspection and approval of producer organisations by member states as very weak and found many irregularities in the withdrawal of produce from the markets.
We were generally dissatisfied with the withdrawal system's operation, but its effects are especially damaging to the UK apple industry. The Committee was keen for the Government to pursue their policy to end the system completely for all fruit and vegetables. With that in mind, it is a disappointment, as many people have already noted, that the current proposals for reforming the fruit and vegetable regime do not give a final date for the end of the system, but simply make it slightly less attractive. The Committee's report made it clear that there would be distinct advantages to UK apple growers from ending the system completely. It is unacceptable that producers in some member states produce apples for no other purpose than sale into intervention.
We were also made aware of the way in which UK producers are disadvantaged—and would still be at a disadvantage under the new proposals—because of the way in which producer organisations are defined. The British horticulture industry has played little part in the creation of surpluses and it would be iniquitous if it was disadvantaged simply because of historical differences in the industry's structure in the UK. The definition of a producer organisation should allow for a variety of legal and commercial entities. I am sure that the Minister will wish to comment on that.
Our recommendations have been echoed by the European Communities Committee in the other place and by our Select Committee on European Legislation,


a formidable phalanx of informed parliamentary opinion. I call on the Government, who have shown their support for those views, to stand firm when the European Commission's reform proposals return to the Agriculture Council.
Besides the European marketing regime, we received evidence about other inappropriate and burdensome regulations. I stress two main problems, the first of which is the ridiculous and unscientific European Community proposals to impose maximum nitrate levels on spinach and lettuce. As originally suggested, those would have had devastating effects on the British lettuce industry, yet there is no scientific evidence that nitrates are harmful to human beings.
The Commission's original proposals have been relaxed, and the Ministry of Agriculture, Fisheries and Food says that the revised standards are achievable by British growers following good agricultural practice, and represent the best possible compromise. None the less, I still ask what the scientific basis is for having maximum nitrate levels at all.
Secondly, horticultural producers often have trouble getting hold of appropriate pesticides, because of the expense and delays in pesticide registration in the United Kingdom. Partly because of what we heard in our horticultural inquiry, we subsequently held an inquiry into the Pesticides Safety Directorate, and we are glad to report that much progress has been made in reducing backlogs in pesticide registration.
However, problems still exist concerning "minor use" pesticides—those used in small quantities, especially in the horticulture industry. We were disappointed that the Government did not adopt one or two recommendations for streamlining the system that we made in our horticulture report. I hope that they will keep the matter under close review.
I shall not detain the House much longer, but our report also dealt with the mechanisms and funding for horticultural research and development, recommending in particular that reforms of the funding and accountability of the Horticultural Development Council be considered. For example, we found that much of its money was going towards research into pesticides, which should have been funded from other budgets.
We recommended that the Government should divert some of their applied research funding towards joint funding of near-market research with the HDC. I should be grateful if the Minister would comment on any progress that has been made. We are glad to see that MAFF has retained sponsorship of Horticulture Research International—the option universally supported by those who gave evidence to us.
Finally, I shall tell the House about a large mushroom farm in my constituency. The Irish Government's market development fund was misused to establish a mushroom industry in Ireland that progressively strangled our mushroom business, and the company in my constituency has now been sold to an Irish company. The loss to the original owner is quantifiable and should be assessed. It should be the Commission's duty to ensure that repayment is made to the original owners, who suffered from the direct and unfair competition created by the Irish Government.
Madam Speaker, I repeat my gratitude to you for arranging our procedures so as to allow horticultural matters to be aired in this way. I understand that the

procedure requires the approval of the Minister and myself if any other hon. Member wishes to intervene, so I make it clear that anyone who wishes to intervene has my approval to do so.

Mr. Colin Pickthall: I thank you, Madam Speaker, for calling me, and I thank the hon. Member for Weston-super-Mare (Sir J. Wiggin) for his all-embracing courtesy. I welcome the opportunity to debate a Select Committee report in the Chamber. After all, an awful lot of work goes into producing such reports, apparently for little return, sometimes.
The difficulty of the investigation resulted from the immense diversity and complexity of the horticulture industry, and the consequent variety of difficulties reported to the Committee. None the less, underlying the investigation were three important factors that occupied our attention.
The first was the trade deficit in horticultural produce, and the scope that that offers for substantial import substitution, which could do nothing but good for our national economy. In that context, I agree with the hon. Member for Weston-super-Mare that the shift in the responsibilities held by Food From Britain was regrettable, although one welcomes the efforts to put something in its place, in the form of the export bureau.
The second main issue is the relative labour intensity of the sector, with its potential for job creation, its seasonal nature and all the implications for horticultural training. Thirdly, there is the capacity of the European Union, while responding to pressures from its widely varying regions, to blunder into regulations that could damage some growers in this country—and no doubt, at times, in other countries too.
The proposal to impose an illogical upper limit on nitrates in lettuce was of particular interest to me, as it would have wiped out many lettuce growers in my constituency and in other areas, notably Cambridgeshire. I was heartened by the united front against the proposal presented on both sides of the House and by the United Kingdom scientific community—an approach also embraced by the Minister's predecessor, who is now the Financial Secretary to the Treasury.
I was grateful to the Committee for its energetic questioning on the nitrates issue. My colleagues on the Committee will be glad to know that the Lancashire lettuce growers whom they met have had a good year. Mr. Keith Ball, who runs Lovania Salads and formed the Solfresh marketing group in Tarleton and Hesketh Bank, is one of my constituents whom they met. Last month he won the national salad grower of the year award for the quality of his produce, and he tells me that this year his firm will produce 300,000 boxes of lettuce.
The nitrate threat has not completely gone away, but at least the immediate threat has been allayed. I hope that the Ministry and its Ministers will keep alert, to ensure that the issue does not become a serious threat again.
I shall touch briefly on two or three other matters raised in the report, the first of which concerns employment and training. There is much anxiety about developments in horticultural training in recent years. The Committee's recommendations on the subject were pretty bland, simply asking the Government to keep a weather eye on the


matter and keep it "under close review". But the Government could not even go along with that fully, declaring that
The Government has no locus to intervene in those decisions"—
that is, decisions on discretionary awards.
The take-up of specialist horticultural courses depends, of course, on discretionary awards. Although it is rather outside the scope of the debate, it is important to know that discretionary awards represent one of the aspects of local education authority spending that have been most brutally cut in recent years. Because the awards are non-statutory, obviously they get clobbered, along with other non-statutory education provision. In my county, as with many other local education authorities, the provision has been cut to ribbons.
Local authorities naturally concentrate such awards as they can still afford on students attending local further education colleges, often at the expense of specialist colleges. As the awards shrink in size and number, the problems of specialist colleges are increasing. The example of the Welsh college of horticulture at Northop in Clwyd has been brought to my attention. This year it may not offer any full-time courses in edible cropping at all, and may have to close its glasshouse production unit because of the lack of grants for students to take up places there.
Horticulture workers are in general the lowest paid in agriculture, and they have the least security of employment. Despite that, unlike the agricultural community as a whole, several of the groups whose representatives we interviewed opposed the retention of the Agricultural Wages Board.
That reveals an interesting problem. Seven-day opening by the supermarkets over the past year to 18 months, plus the moves by big retailers to buy more British produce and offer greater security to growers, which we must welcome, should mean a welcome increase in jobs in the horticultural sector. However, those developments also mean seven-day working, and employers in horticulture, both in growing and in packing, are reluctant to pay premiums to their workers to cover the seven-day regime.
One fact uncovered by the Committee's investigations in the preparation of the report was that the flexibility allowed by the 1993 changes to the Agricultural Wages Board secured much of what employers wanted in the way of flexible rostering, but also brought some safeguards for workers. Nevertheless, many employers, especially in mushroom growing, use casual labour at weekends to avoid premium payments. I make no point, at this stage in any case, about employment practice, save to say that the AWB arrangements seem to be both adequate and flexible in regard to the problems and I fully support the Select Committee's recommendations.
The Select Committee also considered representations from the industry about foreign workers. I understand the concerns about the potential use of eastern European casual workers to undermine UK casuals or even permanent workers. However, the National Farmers Union's evidence in particular clearly pointed to the need for more foreign student labour in horticulture during the summer, especially in the south-east. Foreign students form a particular and circumscribed group of about 4,000 workers, the use of which is worth reconsidering. Casual

labour among United Kingdom students in European horticulture and viniculture is a long and valuable tradition, and if we can maintain it and at the same time help the horticulture industry by expanding such labour, it can do little but good.
The horticulture industry, specifically vegetable and salad growing, which most interests my area, exists— I hope thrives—without much help, subsidy or grant. Nevertheless, the industry requires Government help from time to time. It cannot, for example, completely sort out the problem of discretionary awards and training. National and local governments must do that.
On an entirely different subject, but continuing the theme of Government help, the Committee noted when it visited the Almeria region of Spain that there was enormous investment in renewing the irrigation system— paid for, as far as we could tell, by the regional government, which was helping growers to compete more effectively with UK and other European growers, and to try to extend the season. By a remarkable coincidence, the following summer in Britain was the most drought-ridden on record. People involved in the industry in my area feel very strongly that there should be grant aid or a taxation incentive to encourage the increased provision of water storage facilities and water preservation and recycling systems in anticipation of global warming causing more and more wonderful, hot, dry summers. It is a serious point, because people waste much water and the horticulture industry is no exception.
It seems odd that the Government have decided to withdraw from the European Union processing and marketing fund from 31 March, years before the expiry of the original deadline. English growers might be seriously disadvantaged in comparison with other EU states, and Scotland and Wales, where I understand the fund is to continue. It is hard to see how that decision coincides with the Government's desire, which I am sure we all share, to correct the trade deficit in fruit and vegetables.
Since I come from an area with an extensive glasshouse industry, I also urge the Government to take a much more positive stance on the Committee's recommendation that the glasshouse industry should be exempted from any possible energy tax from Europe. Historically, our glasshouse industry has been disadvantaged, as the hon. Member for Weston-super-Mare mentioned, by artificially lower energy prices for glasshouses in Holland. A similar or greater disadvantage should not be allowed to recur.
Should the wholesale market experience the severe decline that has been forecast, large supermarkets would enjoy a type of monopoly that would damage the horticulture industry. I therefore urge the Government to take a more proactive role in the rationalisation process than their response to the Committee's recommendation suggests.
The potential for the horticulture industry is immense. At present, it employs many workers. The Transport and General Workers Union estimates that there are 36,000 workers, of whom 16,000 are casual. I agree, however, with the view that its contribution to the economies of many areas such as mine is out of all proportion to the number of employees. The sector is extraordinary for its relentless hard work and apparently infinitely flexible enterprise. In recent years and usually in partnership with supermarket chains, it has become the centre of exciting research and development, which is dramatically


improving the quality, yield and taste of its products. The standard of many products, such as tomatoes, is capable of challenging produce from much more favoured areas of Europe.
The trade deficit in fruit and vegetables remains at about £3 billion, and much of what we import can and should be grown and processed in this country. To enable our businesses to make strong inroads into that deficit, the Government do not have to play a strong interventionist role, but should be nudging and tweaking the system in ways identified by the Committee and the industry, such as continuing their level of support for Horticulture Research International; bringing on and off-label approvals more into line with most of our EU counterparts at the speed that they seem to be able to organise such things; reconsidering some of the planning obstacles to development, especially in green-belt areas and for horticultural haulage firms, which have particular difficulties with planning regimes; being more proactive in helping to make the marketing system more efficient— the single contact point that the hon. Member for Weston-super-Mare, the Chairman of the Committee, mentioned—and negotiating the redefinition of producer groups to allow for grant aid, where it is available, to EU co-operatives. By such relatively small means, the Government could reap huge economic dividends and help the revitalisation and growth of rural areas.
The Select Committee has done a good job, if modest. All its recommendations should be pursued by the Government with some vigour and urgency.

Sir John Stanley (Tonbridge and Mailing): I thank my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) and his Committee and congratulate them on an extremely well-researched and valuable report. I am glad that our new procedures give us the opportunity to debate it. I wholly endorse what my hon. Friend said about the imperative need for radical steps to be taken to stop the grotesque wastage of European Union taxpayers' money in horticulture, and indeed the wider agriculture sector.
Like other hon. Members, I have had the good fortune to be able to travel fairly extensively during the years that I have had the privilege to serve in the House. In doing so, I have found that one place only in my constituency is known around the world. It is known in the deep recesses of the African bush and, as I found out only last month, in the huge terraced hill sides of the cultivatable parts of Nepal. Unhappily, that one place is not either the town of Tonbridge or the village of West Mailing, from which my constituency takes its name, but the East Mailing research station, as it was called until a few years ago. The East Mailing research station is Britain's premier research establishment in the fruit sector—both soft and tree-borne fruit. Over many decades throughout the century, it has built up an unrivalled reputation for excellence that extends around the world.
It was, I suppose, inevitable that when the Government came to office in 1979—committed, in my view rightly, to examining the public sector across the board and to asking what functions that had been carried out by the public sector should continue to be done in that way in the future—an establishment like the East Mailing research station should come under scrutiny. That scrutiny took place during the 1980s, a time of considerable difficulty and near trauma for the research station and its staff.
At the end of the period of uncertainty, there emerged Horticulture Research International, resulting in a great deal of reorganisation, restructuring, staff changes, and changes in the research programme at East Mailing. The outcome was generally regarded as satisfactory, as it produced the continuation of the research establishment with a new focus on the requirements of the horticulture industry. The decision was strongly supported by the industry—a fact that emerged in the Select Committee's report—and the establishment continued under the sponsorship of the Ministry of Agriculture, Fisheries and Food.
Having been through that long and difficult period of uncertainty in the 1980s, the staff at East Mailing not unreasonably hoped and expected that there would then ensue a period of stability and certainty, during which they could continue to build on their remarkable reputation for research and excellence. Sadly, that hope has not been realised so far in the 1990s.
A report on the matter was produced by the Cabinet Office's efficiency unit. I have no doubt that that unit has made many recommendations in the interests of efficiency, but that was not the case in 1994, when it recommended that the research establishment be treated as a branch primarily focused not on agriculture and horticulture, but on pure science. The unit recommended that the sponsorship of the establishment be transferred from MAFF to the Biotechnology and Biological Sciences Research Council.
I was delighted that the Select Committee report threw out that recommendation, and I was equally delighted when the Government—in responding to the Committee's report—also threw out that recommendation. Having disposed of the uncertainty engendered by the Cabinet Office, further uncertainty has now been created by the Government's exercise called the prior options review, which extends to some 40 or 50 Government or Government-sponsored research establishments in different sectors.
News of that further review—not surprisingly—was greeted with great dismay by those who work at East Mailing. We all know that a premium is attached to the continuity of personnel in research establishments, because they are all "people places" where the people involved are fundamental to the value that can be obtained from the establishment's activities. Continuity and certainty are of primary importance. I am not a great horticultural expert, but I believe that if one picks up a plant by its roots, shakes it around and puts it back in the soil, and then redoes that several times, it will not be wholly conducive to the plant's growth. I would suggest to MAFF that that is true also in the case of horticulture research establishments.
I hope that when my right hon. and learned Friend the Minister comes to make his own recommendations under the prior options review exercise—as he is due to do next month—he will have at the forefront of his mind the critical need to maintain stability and continuity at East Mailing. I earnestly hope that he will decide to leave unchanged the new status of the East Mailing Research Establishment within Horticulture Research International, and that its sponsorship by MAFF will remain.

Mr. Paul Tyler: I do not intend to follow the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) on the specific point that he makes,


although I am sure that there is wide sympathy in the House for it. I do not have his knowledge of the East Mailing research station, but I agree that it is important that continuity is maintained in such research establishments.
I share the view of other hon. Members about the value of the report from the Select Committee. We are all grateful to the Chairman of the Committee, the hon. Member for Weston-super-Mare (Sir J. Wiggin), and his colleagues not just for the succinct and effective way in which the Committee covered the subject, but for the succinct and effective way in which the Committee Chairman introduced the report, which will enable a number of hon. Members to speak in what would otherwise have been a short debate.
I do not know, Mr. Deputy Speaker, whether you share my nostalgia for the days when one knew when a particular product came on the market—for example, the first asparagus, the first strawberries, the first Cornish early potatoes or daffodils from the Isles of Scilly. Sadly, those days have to some extent gone. I think that we have lost something, as we now get very little seasonal, or even regional, variety. We can have almost anything at any time of the year.
One of the lessons that I hope that we take from the Select Committee report is that careful sourcing of local and regional products by major buyers could reintroduce an element of the previous system to good effect, with an element of freshness, variety and speciality that many of us would relish. It is not just old 'uns like me with my nostalgia who would enjoy that.
The whole issue of sourcing in horticulture is complicated. Clearly the Select Committee has taken great care to obtain the best possible advice on the matter, and we should listen to the recommendations. I saw some figures recently giving the distance travelled by the average vegetable to arrive at a supermarket in the midlands. It is literally hundreds—sometimes thousands—of miles, depending on the particular vegetable and the time of year. The traditional market down the road actually sells fresh fruit and vegetables that have usually travelled less than five miles. The contrast between the sourcing policies of independent traders and big multiples is very stark, and that discrepancy needs to be attended to if we are to deal with the question of import substitution that I believe is rightly at the heart of the Committee's report. I shall come back to that matter in a moment.
We all know that horticulture is exceptionally sensitive to the time of day or year and to climate. Today, somewhere out in the snow, someone will be reckoning on whether it is worth pulling up or picking vegetables. At any time of year—despite the weather—people are having to think carefully by the hour, and even by the minute. Therefore, pressure on the growers is intense. I echo the point that has been made about the ingenuity, enterprise and sheer hard work that those involved in the industry must put in to make a reasonable living against difficult competition.
In those circumstances, we must also be sensitive to the continuity and security of a contract that a grower may get by supplying to a big supermarket chain. The other side of the coin is that that security may lock the grower

into a long-term relationship that he may find extremely difficult to break if it becomes necessary to do so. The most secure contract of all was the slave contract. Some growers regret very much the extent to which they are locked into particular organisations.
The report refers, as did the chairman of the Select Committee today, to the need to make sure that our producer organisations are not mistreated, ill treated or unfairly treated by the rules and regulations that may emerge from the European Union and the Council of Ministers. I agree, but we also have much to learn from our competitor countries in the EU in respect of the co-operative principle. As the hon. Member for St. Ives (Mr. Harris) said before he left the Chamber, we in Cornwall have moved in a small way towards some effective co-operatives. That is also true in other parts of the country.
The core of the Committee's report is the contrast between its advice and the advice of the Government on import substitution. It is apparent from the report that the Committee took most careful evidence from a huge range of extremely well-informed organisations. After exhaustive inquiries, the recommendation of the Select Committee is specific. It is that the reorientation of Food From Britain towards export promotion is misguided and that the organisation should be much more concerned with import substitution. I believe that to be true, and I believe that the industry does, too. Many of us are disappointed that the Government in their, albeit short, reply to the report have not dealt with that specific and well-based recommendation. I hope that the Minister will expand on that matter.
Of course import substitution and export promotion are not mutually exclusive. That is acknowledged in the report, but paragraphs 88 and 89 make a good case for the issue to be most thoroughly reviewed in the light of the most recent advice. The report states that we should not simply rely on previous views, evidence and data. I hope that the Minister will at least tell us today that Food From Britain is to be commissioned to carry out an appraisal of the advantages of reorientation along the lines suggested in the Committee's recommendation. Such an appraisal should, of course, take into account what would be cost-effective. If reorientation in the longer term necessitates some increase in resources to make the organisation more effective, I hope that that will also be possible.
One issue is not touched on at any length in the Committee's report, but it is extremely important in many parts of the country. The amount of casual labour used in the industry has been referred to briefly. A substantial proportion of the labour is casual. The treatment of casual labour for the purposes of social security benefits causes a considerable problem in many parts of the country. It is one of the difficulties that face many vegetable growers in Lincolnshire. It has been a long tradition in Kent that casual labour provides the hop growers with their main source of assistance. In Cornwall we have had major problems in recent years, especially in the flower fields.
One must bear it in mind that in many of the areas to which I refer not only does horticulture provide great employment potential but there is high joblessness and women in particular find it extremely difficult to find part-time work. It is important that we try to find a way out of an absurd mare's nest of red tape. I am sure that that concern is shared throughout the House.
We must also arrive at a simple system that prevents fraud as far as humanly possible. We all know that there has been fraud. My experience and that of the National Farmers Union is that the complexity of the present rules encourages rather than reduces fraud. Therefore, we must find a simpler system. At present, if a picker in Lincolnshire, Kent or Cornwall does some short-term picking because the time of year or the daylight hours or the nature of the crop—as in the case of early daffodils— make that possible, just one day's picking may exclude that individual from days and days of not only direct unemployment benefit but everything else that goes with it, such as housing benefit or council tax benefit.
The result is that a young woman, for example, whose only employment may be picking finds it impossible to take up that employment. The regulations have forced local labour out of many pickers' fields. As a result, many growers have perforce had to rely on gangmasters from other parts of the country or even other parts of Europe to provide gangs of pickers. That cannot be a sensible solution. It is damaging to local employment prospects.
I have made representations to the Department of Social Security, the Department of Employment, as it then was, and the Ministry of Agriculture, Fisheries and Food. I note from the report of the horticulture committee to the annual meeting of the NFU yesterday that negotiations between the union and the Department for Education and Employment have continued for months and months, but small progress is now being made. I hope that the Minister might be able to give us some examples of what is intended.
The NFU suggested a simple pilot cheque book scheme. I understand that that was ruled out for one reason or another, but somehow we have to make it easier for local people to give their casual labour. Otherwise, an all too sad sight in Cornwall in the past couple of years will recur year after year. Last March, I found myself driving past a wonderful golden field full of daffodils in full flower. That was a disaster. It might have been good for the tourists coming down to Cornwall for an early spring holiday, but it meant that some grower had lost his whole crop. When I asked why, I was told that it was because the grower could not get local pickers for love nor money because none of the local people could afford to do the job.
It would be the most appalling example of failure to deal with import substitution if we had more and more fields of Cornish daffodils in full flower and the Welsh had to import their daffodils from overseas for St. David's day.

Mr. Robert Atkins: Time permits me to intervene only briefly. I do so to congratulate the Select Committee on an excellent report. I read it soon after leaving ministerial office last August and I found it interesting and extremely knowledgeable.
I am interested to follow the hon. Member for West Lancashire (Mr. Pickthall). He speaks with some knowledge on horticultural matters. He represents a good chunk of the area to the south of the Ribble, adjacent to my constituency. I shall inherit four of the wards that he now represents under the boundary changes. In addition to my existing constituency activities in glasshouse and vegetable cropping, I will take on some of the growers

whom the hon. Gentleman represents. Like him, I know about horticulture from my experience in South Ribble. I also know about it from when I was a Minister in the Northern Ireland Office and had responsibility for food.
I share the concern expressed by my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) about the Irish mushrooming operation which sends vehicles all the way through Northern Ireland to come across to this part of the United Kingdom, with all the consequences to which he referred.
I am impressed by the quality of the activities performed by the growers in my present and future constituencies. They are a remarkable bunch, as my right hon. Friend said, and an independent bunch. They work extremely hard at all hours of the day and night and different periods in the year to produce the food that we need. I am in the process of carrying out a survey among all the growers in my constituency and nearby to find out what their concerns are. The House will not be surprised to learn that many of the points which the Committee investigated are dear to their hearts. We have heard about the import substitution argument. Certainly, as the hon. Member for West Lancashire will confirm, the problems relating to the import of Spanish and Moroccan tomatoes, nitrates in lettuces and what growers perceive as unfairness about what they call the unlevel playing field— the growing industry in Europe—require that something must be done about them.
I am sure that the report will provoke the Government to do what I know my hon. Friend the Minister has begun to do, and what his predecessor, my next-door neighbour, the hon. Member for Fylde (Mr. Jack), the Financial Secretary to the Treasury, was doing, and fight our corner strongly in Europe to ensure that the growing industry in Lancashire, about which I am concerned, and in other parts of the country, is protected and developed. The capacity and potential of the industry is enormous. If it is properly treated by the Government and by the European Union, its ingenuity and its capacity for hard work, new marketing techniques and exploiting new varieties of crops is such that it can build on its reputation as the best producer of those crops in this country, as well as in the rest of Europe and even further afield.
I am pleased to be able to speak about horticulture and add my congratulations to the Committee for an intelligent, exhaustive report to which the Government's response has so far been so good. There has been unanimity across the House on the matter. If the unanimity of commitment to the industry continues, I suspect that the growers in my present and future constituency will have cause to thank the Select Committee for its report and the Government for their response.

Mr. D. N. Campbell-Savours: Tucked away in paragraph 95 of the Select Committee report, students of development and agriculture will find an especially interesting passage on which I should like to comment. The Committee states:
we consider that the EU can provide substantial assistance by judicious relaxing of the terms of entry for South African exports of horticultural produce: whether by association with the Lome Convention or under a separate trade agreement. Any such agreement should be absolutely dependent upon conditions assuring that no disruption is caused to EU markets, taking account of the


[Mr. D. N. Campbell-Savours]
respective marketing seasons of European and southern hemisphere produce. There may also be advantages to British agriculture in freer trade with South Africa".
I quote that because, during the inquiry, which I joined quite late on, we visited South Africa—in somewhat controversial conditions, if I remember rightly.
There was an important underlying characteristic to our visit. While we were there to consider the implications for British horticulture of developments in South Africa— we examined its extremely efficient single-channel system for marketing its products—some of us went with the additional agenda of examining what was happening in South African agriculture and horticulture after the major political changes there. I concluded, as did some hon. Members of all parties, that, to some extent, horticulture held the key for development in South Africa.
My hon. Friend the Member for Bristol, East (Ms Corston) and I visited Khayelitsha, a township of some 700,000 people outside Cape Town in the middle of the area in which the South African deciduous fruit industry is based. While we were there, we were given a little document, which stated:
Today Khayelitsha is the fastest growing residential area within the greater Cape Town area. Current projections put the population at one million by 2000.
Current estimates give the population as some 700,000 in an area of only 6,500 acres. That is the nature and scale of the problem in South Africa. I cannot describe the conditions that existed in that township, but we know that South Africa has huge potential for horticultural development as long as markets are opened up worldwide and it is given the access that it requires.
Unless we are prepared to open up markets—and in particular the European Union market—to the products that can come from South Africa when they are out of season in the European Union, and unless there are parallel developments in other parts of the South African agriculture and horticulture economy, there will inevitably be trouble again in South Africa. We have it in our hands in the European Community to bring about those changes.
In paragraph 95 of the Select Committee report, we comment:
South Africa is also seeking the closest possible association with the Lomé Convention: the European Commission has been mandated by the Council to negotiate possible South African membership of the Convention and, in the longer term, a free trade agreement. COPA/COGECA has fiercely resisted this move, claiming that the EU's processed fruit and vegetable sector might face extinction.
We have a choice to make: either we concede on that front and the developed nations of the world—especially Britain, in the context of Europe—argue the case for greater penetration of our markets by South African produce, or we pay the inevitable price in future.

Mrs. Ann Winterton: Does the hon. Gentleman agree that, over the years, Britain has been very interested in doing trade with South Africa and, in Europe, we have led the cause for improving the conditions of that country? Is not the stumbling block, as we have heard already in the debate, the other European nations?

Mr. Campbell-Savours: That is absolutely right.
I should like to take up my point in a future debate, perhaps on development. I understand that we are short of time. I shall resume my seat, having put my case that we should open our eyes to what is required.

Mrs. Llin Golding: I also congratulate the Select Committee on producing this excellent report. Unfortunately, because time is so limited, I must confine my remarks to certain aspects of the proposed new EU fruit and vegetable regime and to research and development.
The Minister knows the strength of feeling in Britain about the EU's spending taxpayers' money on buying certain surplus crops and then destroying the bulk of them. That scheme has led to massive fraud and overproduction. The Select Committee was right, when talking of apples, to recommend that the Government pursue vigorously their policy of ending all fruit and vegetable withdrawal payments. When the Commission made proposals for reform in August 1994, they were greeted as a step in the right direction. The Select Committee supported the Commission's proposals to reduce withdrawal prices to an uneconomic level over a four-year period and wanted the eventual abolition of withdrawals. The Government agreed with that.
One major difficulty for British growers has been that payments are made only through producer associations, of which there are fewer in Britain than elsewhere. For that reason, the Select Committee made the important recommendation that producer organisations eligible to receive money should be defined so as not to leave Britain at a disadvantage. That was agreed by the Government.
To sum up the Select Committee's position, it wanted an end to withdrawal payments, supported making them uneconomic over a four-year period and, if taxpayers' money was to be scattered around, wanted it to be easier for British growers to get their hands on some of the loot. That is what it wanted; what it got was another matter entirely.
Their credibility in Europe being nil, the British Government achieved nothing in the discussions on the proposals studied by the Select Committee. If anything, they went backwards. The draft Council regulations on the common organisation of the market in fruit and vegetables and in processed fruits and vegetables, adopted by the Commission on 4 October 1995, were extremely disappointing from the British point of view. They were a complete let-down for British producers and consumers, to say nothing of the taxpayer. That general view is expressed in the report, dated 19 December, of the Select Committee of the European Communities in the other place. The report said that, in the evidence of witnesses:
Aspects of the proposals were welcomed as steps in the right direction but the overall tone was one of disappointment that there was no signal of the end of withdrawal and criticism of the proposal".
The Committee concluded:
the perpetuation of the intervention system and the enhancement of the role of Producer Organisations … are not … the right way forward.
Hon. Members should read that report to understand how matters went from bad to worse between the communication of August 1994 and the draft regulations of October 1995. First, the proposed transitional period had been extended from four to five years. Will the Minister tell us how the Government allowed that to


happen? Secondly, the withdrawal system may be extended by a proposal to allow producer organisations to use funds to buy in produce that is not covered by the intervention scheme. Thirdly, to quote the report:
None of our witnesses have been convinced that the reduction in the level of withdrawal compensation by 15 per cent. over five years would reduce the compensation to a non-remunerative level.
How does that leave our Select Committee report? Its recommendation, which has been accepted by the Government, was:
We support the Commission's proposal to reduce withdrawal prices to an uneconomic level for producers over a four-year period and would like to see the eventual abolition of withdrawals.
As the proposals have become regulations that will, during a five-year period, reduce the payments—but not, in the view of informed witnesses, to uneconomic levels—is it any wonder that people feel let down? The position in relation to producer organisations is, if anything, worse.
In the original proposals, the Commission laid down that, to be able to receive payments, producer organisations must effectively market a high percentage— 80 per cent.—of the marketable produce of their members. Although British producers thought that 80 per cent. was far too much, the percentage was raised to 90 per cent. in the draft regulations. Worse still, the producer must place 90 per cent. of his total—perhaps varied—produce with a single producer organisation. How on earth did that happen? Even imagined benefits are disappearing under re-examination.
Witnesses in the other place expressed concern that the destruction of good produce will continue under the proposed regulations and that, despite the creation of a corps of inspectors, massive fraud will continue. That would be a disgrace. The Minister and his colleagues must do better in looking after our interests in the negotiations on the draft regulations than they have in the discussion on the communication.
I should like clarification on one other matter. In paragraph 29 of their response, the Government question the Select Committee's support for the creation of a forum, which would include growers, customers and scientists, to debate the research strategy for horticulture. The Government have said that they intend to build on existing mechanisms that give a clear focus on priority matters and bring together the key players. In his reply, will the Minister explain what he has in mind?
When I recently visited the headquarters of Horticulture Research International, people there clearly said that they do not want to face any further changes as a consequence of the prior options review. As they see it, their work is well focused on an industry with a clearly defined mission, and it is going well. They argue that the organisation is already close to being privatised or quasi-privatised and they want to avoid losing key sites and work to other organisations.
I am sorry that there is insufficient time to do this report justice. I only hope that some of the Select Committee's drive and sense of purpose will rub off on to this feeble and ineffectual Government.

The Minister for Rural Affairs (Mr. Tim Boswell): I am grateful for the opportunity to debate this important issue on the Floor of the House. I am also honoured to be

the first Minister to take advantage of the new arrangements to debate Select Committee reports, even if—as some hon. Members will know—it means missing the start of the annual Bramley and spoon race that may even now be taking place on College green. With luck, and because of our arrangements, it may be possible for us to be, metaphorically, in at the kill.
I am extremely grateful to the Select Committee for its efforts in producing a wide-ranging and considered report on an extremely diverse industry, for the tone of its report and of this debate and for the understanding that has so far made it possible, in a short time, to accommodate seven hon. Members. That has been extremely encouraging.
I thought that the hon. Member for West Lancashire (Mr. Pickthall) put it extraordinarily well when he said that the Select Committee has done a good, if modest, job. It occurred to me that that was a motto that one could properly apply to horticulture as an industry: it does an excellent job and it does not make a fuss about it. Its achievements should be acknowledged and problems should be actively and sympathetically considered.

Mr. Harris: In relation to the problems facing the industry, my hon. Friend is of course aware of the great concern in west Cornwall about Dutch seed potatoes, which are probably infected with brown rot. I have heard reports that what growers had feared has happened: the potatoes delivered to at least one farm have been found to be infected with brown rot. Will my hon. Friend comment on this situation? It is a very important point.

Mr. Boswell: I must acknowledge that the situation is serious, and growers' concerns are understandable. The Government supplement the tests that already take place in the country of origin, the Netherlands, with our own, both of which are drawn to the attention of the European plant health authorities. As a result of those tests, out of 300 samples, we had suspected infection in one case of stock. We have now confirmed that it is brown rot and the potatoes are being destroyed. We shall continue to exercise the utmost vigilance on the industry's behalf.
As hon. Members have raised so many detailed matters of concern, I shall endeavour to reply briefly to as many of them as I can. If anything has been overlooked, we shall certainly take account of what has been said in the debate and, if appropriate, reply in correspondence. I am anxious to get on with the major points that have been made.
The introduction to the debate by my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) clearly encapsulated the report and the main matters of interest. He was concerned about the organisation of marketing systems, about which I shall say a little more later in relation to the domestic situation. He was also concerned about reform of the European Union regime. He was concerned about nitrates in lettuce—a matter that also exercised Conservative and Opposition members of the Agriculture Committee. We have worked very hard to achieve an acceptable solution—we have introduced some changes in the European approach and a derogation for our growers in terms of domestic trade. We shall continue to work on that matter, and scientific evidence will have to be produced for a continuing restriction to be justified.
My hon. Friend also mentioned his concern about the Irish mushroom scheme, the market development fund. The House may be interested to know that approximately


85 per cent. of the moneys that have been improperly paid out have already been recovered by the Commission. Any compensation to individual growers appears to be a matter for private law between the grower, the Commission and the Irish Government. If I may, I shall write to my hon. Friend about that.
My hon. Friend mentioned one of the report's major recommendations about the improvement of statistics. We have certainly taken that issue on board. We must find a balance between making them not too intrusive, but as effective as possible. At the European level, we are discussing the issue with Eurostat.
Lest we overlook them, it might be useful if I deal with the two recommendations of the Select Committee which the Government felt unable to accept, and to which hon. Members have referred. The first relates to funding for Food from Britain, which the hon. Member for North Cornwall (Mr. Tyler) mentioned. Three years ago, we carried out an independent review that took evidence from a wide cross-section of the industry and considered all areas of activity. We decided, broadly, that the Food from Britain initiative should concentrate on exports. That approach has been successful. While the Government continue to provide funding of £5 million per annum, the level of funding from industry is also increasing—it rose by 17 per cent. last year. That would suggest that industry endorses what is being done and that the new focus is appreciated.
In view of the concerns expressed by the hon. Member for North Cornwall, I should make it clear that a specific interest in the Food From Britain initiative is speciality foods. Perhaps with a little ingenuity, his local growers could involve themselves in that sector.

Mr. Richard Alexander: We understood that Food From Britain had been asked to focus on value-added products as opposed to fresh products. The Government were criticised for their response to the Select Committee in that they had not made such a request. Can my hon. Friend confirm whether that emphasis on value-added products has now been put on Food From Britain?

Mr. Boswell: There is a clear interest in the export of food and drink, which is handled by my ministerial colleague. I shall reflect on the question and give my hon. Friend a considered reply on Food From Britain's exact current remit.
The Government were unable to accept the Committee's recommendation about pesticides— on notification to growers ahead of the type of problems that we encountered with organophosphates in carrots. We understand growers' concerns, but we have an obligation in the interests of food safety to release information as soon as possible to all those with an interest who may have a need for it. We have been considering the possibility of giving a day or so's notice to allow interested parties to prepare a considered response. Hon. Members will be familiar with the type of arrangements that apply through the usual channels in this place, but we must find the right balance to meet the occasion.
I was interested in the tenor of today's debate in relation to employment and training. As one who used to be a practitioner in horticulture, I understand the

importance of a labour force. The Committee referred to the possible exclusion of horticulture from the Agricultural Wages Order 1994, but it would be for the Agricultural Wages Board, under present legislation, to alter the structure if it so wished.
The main concern has been about seasonal workers. In relation to United Kingdom workers and those from the European Economic Area, there is no difficulty establishing who is working here. Seasonal workers from outside the Community are covered by the seasonal workers scheme. We have recently announced some changes to that scheme, which I hope will make it more flexible. We continue to discuss it with our colleagues in the Department for Education and Employment.
The hon. Member for North Cornwall expressed some concern about the employment of casual workers from the United Kingdom. He will be aware, as he rightly said, that it is a problem as much for the benefit structure as for the tax structure. I have no definite news to offer him or the hon. Member for Workington (Mr. Campbell-Savours) except to say that discussions continue at a technical level. Their concerns will be drawn to the attention of the relevant Departments and will reinforce our efforts to reach an acceptable solution.
Hon. Members will be aware of my previous involvement in further and higher education. I have seen both sides of the argument and I can assure the House that, even if I have no direct locus in the discretionary awards, which are as they are described and the responsibility of local authorities, that does not mean that this Minister does not take a keen interest in a satisfactory resolution of some of the problems that have been identified.

Mr. Campbell-Savours: Using his knowledge, and his friendship with Baroness Chalker, will the Minister bring home to her the need to ensure that aid to South Africa for education, in particular about horticulture, is channelled where it will benefit black students and not just white ones?

Mr. Boswell: I shall bear that point in mind. The Government broadly support liberalisation of trade with South Africa and are therefore able to agree with the terms of the Select Committee's recommendation, which contains a number of important safeguards for British growers. I am grateful to the hon. Gentleman for raising his genuine concern about a matter that concerns many of us.
My hon. Friend the Member for Weston-super-Mare advocated—as does the report of the Committee of which he is Chairman—a more effective system of marketing top fruit. In many ways, the Committee's considerations have proceeded in parallel with those of the Government. We have, therefore, been able to agree readily with the Committee.
We have been able to make a number of structural changes in relation to the English Fruit consortium and the work of the Fresh Produce Consortium, which goes rather wide of the work of English Apples and Pears. Much is happening to meet the difficulty of local sourcing. I am also aware of the concern about imports of soft fruits from east and central Europe. A trade interest exists and we need to have proper discussions to ensure that trade is not disrupted. We look for a proper measure of liberalisation in the adaption of the European agreements.

Mrs. Ann Winterton: Will my hon. Friend say something about the state of the wholesale markets? It is


important that choice should be available within marketing arrangements so that produce from this country is not just sold through the big supermarkets but is available to independent traders and caterers. The Strathclyde report made some recommendations, but does my hon. Friend agree that a catalyst is needed to bring about necessary and ordered change in the wholesale market sector to ensure that better hygiene standards, better quality and a better service are delivered to its customers?

Mr. Boswell: Some of those recommendations are a matter for decision by the trade itself. A new code of practice will be introduced on hygiene. It would be possible to promote the wholesale markets. We cannot, however, provide the resources centrally to do that; the initiative must come from the trade, but we will offer it our encouragement to restructure.

Mrs. Winterton: Will my hon. Friend give way on that point?

Mr. Boswell: My hon. Friend must forgive me, but I cannot give way. I may respond to her question in more detail later.
The hon. Member for Newcastle-under-Lyme (Mrs. Golding) mentioned the European context. Of course we believe that the present regime is wasteful. We do not believe that the Commission's current proposals for reform are satisfactory. The hon. Lady did something of a disservice to the Government by suggesting that we have not resisted those proposals vigorously. It is precisely because we have resisted them vigorously that we have not settled for anything. Substantive negotiations are about to start and we will argue the interests of British growers and the British taxpayer, which in this case happily coincide, vigorously and firmly. Our argument will be reinforced by today's debate.
I listened carefully to what my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) said about East Mailing research station, and I endorse his remarks about its quality and excellence. We must take research seriously; that is one reason why we provided £42 million in capital funds to restructure Horticulture Research International. We cannot avoid the need for a review from time to time to get the best possible value for the taxpayer, but the points that my right hon. Friend made so eloquently will be taken into account in forming opinions in our prior options review.
The whole House should acknowledge our debt to the Select Committee for a very constructive report. It has done a service to the House and reflected the horticulture industry, which deserves acknowledgment and serves the nation well.

Sir Jerry Wiggin: With leave of the House, Mr. Deputy Speaker, I have but one minute to thank my hon. Friends and Opposition Members for contributing to the debate. We have all learnt a good deal this morning, not only about horticulture but about our procedures. I am sorry that not all hon. Members who wanted to speak could get in, but I am glad to have had the opportunity to debate the report. I hope that other Select Committees will be able to take advantage of this procedure, as we have this morning.

Employment Creation (Northern Ireland)

[Relevant documents: The First Report from the Northern Ireland Affairs Committee of Session 1994–95, on Employment Creation in Northern Ireland (House of Commons Paper No. 37-I and -II) and the Government Reply thereto, published as the First Special Report of Session 1994–95 (House of Commons Paper No. 642).]

Mr. Clive Soley: I welcome the opportunity to introduce the Select Committee's first report. A Northern Ireland Affairs Select Committee is a fairly recent innovation. Importantly, it gives us the opportunity to debate on the Floor of the House the economic and social issues that affect Northern Ireland. All too often in the House we speak about the troubles in Northern Ireland, but other issues affect Northern Ireland in the same way as they affect other parts of the United Kingdom, and it is important to consider those issues thoroughly.
Our first report was on unemployment, because we regarded that as profoundly important. The Committee was chaired by the late Sir James Kilfedder until his death in March 1995. Most of the report was completed under his chairmanship, and it is an appropriate time to remember his contribution. The hon. Member for Sevenoaks (Mr. Wolfson) chaired the Committee for the remainder of the time before I became Chairman.
We all wish to thank, not only the members of the Committee for the way in which they involved themselves in producing the report and their work since then, but the staff who service the Committee. The Committee is composed of 13 hon. Members, representing five different political parties, so it is very different from many Select Committees in the House of Commons, but it has worked well and focused on some important issues, which I anticipate that it will continue to do.
We chose unemployment as the first issue because we regarded it as profoundly important to the people of Northern Ireland. We have known for a long time that Northern Ireland has specific serious problems in that respect. It is one of the poorest regions in the European Union—136th on the list of 179 regions—and the poorest region in the United Kingdom.
One of the oddities about Northern Ireland is that the growth rate has been faster there than in other parts of the United Kingdom, even throughout the past 25 years of the troubles, so economic activity has been better than many people expected. It is important not to lose sight of that fact, despite the problems that we mention in the report.
It will be seen in the report, and is common knowledge, that the public sector in Northern Ireland is disproportionately large. Given the circumstances of the past 25 years, that is to be expected, but about 32 per cent.—a third—of all employed and self-employed people in Northern Ireland work in the public sector. That is a large percentage.
With the welcome ceasefire, we all hope that the need for spending on security will gradually decrease, but we make the important recommendation to the House and the Government that it is vital that the Government manage the decline in public sector spending. We cannot simply decide that we need fewer security guards and fewer people policing areas in the infrastructure of communities.
I remember, as many hon. Members do, the number of people guarding hotels who were employed by the hotels. With luck, that type of thing will no longer be needed, but it is not enough to withdraw those jobs and hope that those people find employment. We need some emphasis on retraining and special skills for people who leave such services, which have been vital. We owe a great deal to those people, so it is important that they are given the support that they need in finding new jobs and retraining.
We drew specific attention to long-term unemployment because in Northern Ireland it stands out as an especially difficult problem. Fifty-six per cent. of unemployed people are unemployed for more than a year and 23 per cent. are unemployed for more than five years. That is a very large percentage, and 50 per cent. of unemployed people have no qualifications.
In that context, as in other parts of the United Kingdom, the pattern of work is changing. I hope that the Government will not assume that the fact that more jobs are being created solves the problem; it does not, for two reasons. First, long-term unemployed people need specific help and, secondly, employment is growing faster in part-time work than in full-time work. Nothing is inherently wrong with part-time work, but that has implications for the benefit system and implications for families, who often have lower incomes because jobs are part-time.
Useful background reading to the report is Coopers and Lybrand's "Northern Ireland Economic Review and Prospects". The review says that
most of the increase in employment was in part-time jobs which now account for 30 per cent. of total employment".
The pattern is no different from that in other parts of the UK and other parts of the western world.
The changes that occur in other industrial regions when heavy industry declines mirror the problems of Northern Ireland. There are periods of long-term unemployment for males especially. Then part-time employment grows, linked to some of the new industries entering the region. There is a need to retrain people who previously worked in the shipyards, for example, and to encourage research and development so that the part-time jobs that are created are not only light assembly jobs without significant skill input. That is why there was a great welcome for the Daewoo plant that was set up in Northern Ireland, which has brought with it some research and development.
There are many similarities between the economic problems and structural change that are evident in Northern Ireland and those that have characterised other parts of Britain—the north-east, south Wales and especially southern Scotland. In southern Scotland, the link between Edinburgh and Glasgow was vital in redeveloping an economy that, 20 years ago, had similar problems to those of Northern Ireland. Southern Scotland is now a major chip producer, producing about 80 per cent. of the chips in Europe. If we brought about similar development in Northern Ireland—especially if we used the link between Dublin and Belfast to build the new economy—the advantages to the people of Northern Ireland might be enormous.
Another of our recommendations, therefore, is that the Government consider the infrastructure between the north and south so as to improve development in that area.

Six of the United States' mainframe computer manufacturers are located in the south of the island, but in Northern Ireland, where I believe that we have significant potential for chip development, hardly any work of that type goes on, which is a shame. We need that type of research and development.
In parallel with that type of development, we should develop the infrastructure in Northern Ireland. Specifically—the right hon. Member for Strangford is very keen on this—the road to Larne should be developed. It is used significantly by exporters from Northern Ireland and from the Republic of Ireland, as we say in the report. Developing the infrastructure is very important.
The relationship between the benefit system and the employment patterns that I described is vital in Northern Ireland, as it is throughout the United Kingdom. I have argued for many years that we need a system that recognises the fact that people move into and out of work with increasing frequency and makes it easier for them to do so without losing income and getting into debt, which discourages them from giving up benefits. The system should also recognise the part-time work factor. If the cut-off points are too severe, obviously people are disinclined to take low-income, part-time jobs that might otherwise be available. The report recognises that that is a national problem, and the Secretary of State and his Ministers have an opportunity to reflect that fact in general Government policy.
The report refers also to the core skills needed by the unemployed. As I said earlier, 50 per cent. of the long-term unemployed in Northern Ireland have no qualifications. That is a very worrying statistic because it means that those people do not have core skills. The Committee recommends that core skills should be developed in all training programmes.
The Committee also hopes to examine the education system in Northern Ireland some time in the future. The Minister will know that, although the Northern Ireland education system has many good and attractive features, the more disadvantaged students are under-performing. The report suggests that the Government should spend money more effectively on disadvantaged students and on nursery education. Evidence gathered in the United Kingdom and in almost every other country in the western world indicates that spending on nursery education— introducing children to the education system at a fairly early age—is very beneficial to their later achievements in work.
I shall be brief as a number of hon. Members wish to speak in the debate. However, I must refer to the question of investment, and particularly research and development in Northern Ireland. I was pleased to note that, on page 10 of their response, the Government reacted positively to the Committee's concern about the low level of investment in research and development in Northern Ireland. I touched upon that point earlier. We believe that that investment must be targeted and the Government seem to share that view.
I cannot over-emphasise the importance of targeted research and development. An economy that is on the fringes of the European Union and of the British economy must have the edge in research and development in order to put it ahead of the game. A few years ago when I was shadow Minister with responsibility for Northern Ireland, I examined the question of agriculture and food


processing and packaging. It was clear that Northern Ireland had enormous potential in that area. The report also refers to that matter and it makes recommendations with regard to the role of the Department of Agriculture. There are considerable opportunities in the area of food processing and packaging in Northern Ireland, but it is an advanced technology which is becoming more advanced every day. I often wonder whether Northern Ireland could move into the biotechnology area, because it has the obvious base for that technology. Northern Ireland needs those high levels of research and development.
I was struck by an interesting statement in the Coopers and Lybrand report. Although it does not refer specifically to research and development, it contains knowledge about investment generally. Page 28 of the report states:
There are no up-to-date data on actual investment spending patterns. The most recent numbers for the manufacturing sector come from the latest regional accounts data which give estimates of investment only up to 1993.
Building on what the report and the Minister have said, I wonder whether we could make an effort to try to get a better picture of the investment pattern in Northern Ireland—in terms of not only total amounts, but of research and development. We do not want to see a repeat of what occurred in the late 1970s when international and national companies received considerable grants to establish their businesses and invest in Northern Ireland but then left during the slump of the 1980s. Virtually no infrastructure remained in place to provide work for those who had been left unemployed. We should have a more detailed look at the way in which the investment pattern in Northern Ireland is emerging, including the balance between industrial investment and research and development.
I would like to refer to a whole range of issues in the report, but I promised to keep my remarks to less than 15 minutes so that other hon. Members can contribute to the debate. In conclusion, the people of Northern Ireland have their fingers crossed about the long-term success of the ceasefire—not least because they know that they deserve, and can achieve, a better life. Northern Ireland is a wonderful place, as everyone who has been associated with it knows, and its people are very good and very decent.
We must recognise that Northern Ireland can have a normal, healthy economic development and that its people can enjoy above average quality of life. To achieve those aims, we must improve the economic conditions in Northern Ireland and improve the unemployment figures. Unemployment is a severe problem in Northern Ireland, which is one of the poorest regions in Europe and the poorest region in the United Kingdom. That is why the Committee's first report is so important and why we ask the Minister to respond to it today and to continue to address the problems that we have put before the House.

Mr. John D. Taylor: I support the speech of the Chairman of the Northern Ireland Affairs Select Committee, the hon. Member for Hammersmith (Mr. Soley). The Committee is a new venture for the House and it introduces to the people of Northern Ireland the same facilities that exist in other parts of the United Kingdom—a fact that is welcomed throughout Northern Ireland. The Committee took many years to establish, but it is now proving its worth.
This is the first report to emerge from the Committee, which commenced its work under the chairmanship of the late Sir James Kilfedder. He was my neighbouring Member of Parliament for the constituency of North Down. He was full of enthusiasm about the future success of the Northern Ireland Affairs Select Committee. In debating the Committee's first report, I place on record our appreciation of the leadership that he gave to the Committee during its first few months of deliberations.
I also thank the hon. Member for Hammersmith for the way in which he has presided over the Committee's subsequent meetings. He and I have differences of opinion on many subjects—including social and economic matters and certainly about Irish nationalism—but we have managed to work together. As the hon. Gentleman said, the Committee comprises five political parties, including the two largest parties in the House and the three parties from Northern Ireland—the Ulster Unionist party, which is represented in the Chamber today; the Social Democratic and Labour party, which is represented by the hon. Member for South Down (Mr. McGrady); and the Democratic Unionist party, whose representatives may be along later.
The Committee addressed the question of unemployment, which is a major problem in Northern Ireland. When one hears that Northern Ireland is the most depressed area of the United Kingdom, one is led to believe that things are very bad in Northern Ireland. However, it is important also to place on record Northern Ireland's successes not just in the past 18 months since the temporary ceasefire began, but in the previous decade.
As the report points out, in the past decade Northern Ireland has been more successful at creating new jobs than any other region of the United Kingdom. However, that has not had a significant impact on that country's unemployment figures because it also has the highest birth rate in the United Kingdom. I was amazed to learn that the birth rate in Northern Ireland is higher than that of Catholic Ireland—and that is saying something. No matter how successful we are at creating new jobs in Northern Ireland—we are particularly successful in that area—we must also contend with the greater demand for jobs as a result of the high birth rate.
It is also interesting to note that Northern Ireland has a very good quality of life. Its educational achievements are great and its transport system is good. We used to talk about migration from Northern Ireland, but people are now moving there from other parts of Great Britain. Not only does Northern Ireland have a high birth rate but more people are coming to the Province than leaving it, creating a greater need for jobs than for many years.
Energy costs in Northern Ireland are the subject of a recently published separate report from the Committee— rightly, because while the Province is subject to a monopoly control of electricity prices, it is under a great handicap.
Transport is also of great importance to Northern Ireland. My hon. Friend the Member for East Antrim (Mr. Beggs) has campaigned continually for the improvement of the A8 from Belfast to Larne harbour. No doubt he will dwell on that matter if he catches your eye, Mr. Deputy Speaker. As a member of the Northern Ireland Affairs Select Committee, I want to emphasise that we referred to that road system regularly. As the hon. Member for Hammersmith mentioned, I stressed its


importance because only 5 per cent. of Northern Ireland trade goes to the Republic, whereas 95 per cent. goes to Great Britain. The road to Larne is twice as busy as the road to Dublin. A Government commitment to funding the A8 improvement scheme is a priority for the Province's infrastructure.
Northern Ireland is also successful in education, with the best A-level results in the United Kingdom—as was again confirmed last week, when school league tables were published in the Northern Ireland press. The other side of the story is that the Province has the largest percentage of young people leaving school with poor qualifications, which contributes to longer-term unemployment. The hon. Member for Hammersmith mentioned the need for proper pre-school and nursery education provision. That subject is dear to my heart because as someone who has contributed to Northern Ireland's high birth rate, with six children, I am aware of the lack of pre-school and nursery education.
I hope that the £240 million of peace and reconciliation money being allocated by the European Union to Northern Ireland will be used properly, not foolishly. I have great fears and suspicions, as I watch how the money is being controlled at present, that some of that funding will disappear down the drain. If it were to be used properly, one priority should be the creation and provision of nursery education in Northern Ireland, which has the lowest level of such provision anywhere in the United Kingdom.
Jobs are of course difficult to provide. Under the chairmanship of the late Sir James Kilfedder, the Committee visited South Korea. I personally travelled on to Taiwan. Although members of the Committee came from many different political parties, we demonstrated that we could work well together as a team in the interests of trying to help Northern Ireland.
In Seoul, one could not but be impressed by the presence of the Industrial Development Board, its personnel and its acceptance in South Korea. I hope that I will not be speaking out of turn when I say that officials who represent the United Kingdom at various levels in Seoul were able to confirm that Northern Ireland's presence in South Korea is better than that of any other region of the UK, including Scotland. Seven South Korean companies have opened factories in Northern Ireland, and that investment is most welcome. When I went to Taipei, I was impressed by the IDB operation there. The Province has already attracted one firm, Hualon—but it has not yet arrived due to legal problems in Europe. I hope that every effort will be made by the authorities involved to expedite that matter, so that Hualon can make its decision to invest in the south and east Antrim area. The company has promised 2,800 jobs, which is more than the number of people employed in Belfast shipyard. That puts in its proper context that proposed major investment and provision of new jobs. If only we can get over the legal problems. I reiterate my hope that every effort will be made to assist that investment to be made as quickly as possible.
One cause of concern in recent weeks was the Government's decision to reduce by 25 per cent. funding for the action for community employment scheme, which is mentioned at paragraph 254 of the Committee's report. ACE has been important in providing jobs for the young

and unemployed, and in creating a service in the community for less well-off people and those who are elderly and require assistance. Out of the blue, the Government announced a 25 per cent. reduction in ACE investment, at a time of high unemployment.
One problem in the House is that when one tables parliamentary questions, it is difficult now to get answers from Ministers. I tabled two parliamentary questions asking why ACE funding had been reduced. On both occasions, the Minister refused to answer. Instead, he got the manager of the ACE operation to write to me. I was not asking about the way in which ACE was administered but about the decision to reduce its funding by 25 per cent. Ministers should not run away form their responsibilities. They decide Northern Ireland policy and they should answer for it. I deplore the new system whereby Ministers from the Northern Ireland Office— who are not elected by the people of Northern Ireland— refuse to answer in the House for their policy decisions. I place on record the all-party opposition to that 25 per cent. cut in ACE funding—which will be confirmed by the hon. Member for South Down and by the Democratic Unionist Members—when they turn up.

Mr. Soley: If I may add to the right hon. Gentleman's armoury, I discovered yesterday that the Coopers and Lybrand report referred to the immense importance of the ACE scheme to local communities.

Mr. Taylor: That emphasises my point. As we have not been able to obtain an explanation for that funding cut through parliamentary questions in past weeks, we would like one on the Floor of the House today.
I conclude with a problem in my constituency that relates to the policies of the Northern Ireland Office and of the Industrial Development Board. Unemployment is worse in some areas of the Province than in others, and social deprivation in some areas is not equalled in others—so priorities must be set in terms of investment and jobs provision. However, the priority policy that is developed should not be used as a means of denying jobs to areas that are perceived as somewhat better off.
I understand that the Northern Ireland Office and the Industrial Development Board have to carry out the policies of the Northern Ireland Office. Its policy objective is that three out of every four new jobs attracted to Northern Ireland must go to specific areas of deprivation. That is, no doubt, a worthy objective, but it places most of Northern Ireland at a disadvantage in getting new firms and jobs, because they are being concentrated in a smaller number of areas considered to have high social deprivation.
My constituency of Strangford is not considered to be an area of social deprivation. It is considered to be one of the better-off constituencies in Northern Ireland. Yet if one looks at pockets in Strangford, one will find unemployment almost equalling the level of unemployment in the so-called areas of social deprivation. I think of villages such as Portaferry, Kircubbin, and Ballywalter and other villages in the South Down constituency, such as Killyleagh, which will soon come into the constituency of Strangford. I am sure that the hon. Member for South Down will agree that that is a good thing.
The hon. Member for South Down and myself, being neighbours, have suffered alarming unemployment decisions in our constituencies in the past few weeks.


In my constituency alone, in the village of Ballywalter, the Ballywalter Clothing Company has closed with the loss of 150 jobs. There is no major employer anywhere in the Ards peninsula. That one factory provided employment for many people throughout the Ards peninsula, and now it has disappeared. In Comber, in my constituency, the Albion Clothing Company, which manufactured trousers, has closed down in the past week. Nearby—and many of my constituents are involved— Shorts has a major problem as everyone knows. There is the threat of the loss of 1,500 jobs, many belonging to my constituents in Strangford. This weekend, more of my constituents have lost their jobs—I hope for a month only, but we do not know—in the Killyleagh Spinning Company, which suddenly told all 150 workers that they would be off work for a month.
All that is happening in a constituency that is considered to be prosperous, yet—I repeat—in places like Ballywalter or Killyleagh, there are very few other opportunities for employment. It is important that the Northern Ireland Office ensures that the IDB is given every encouragement to try to attract new industries to those rural areas, where there is no alternative manufacturing employment. Yes, there are jobs on the land in farming and agriculture that increase the level of prosperity in the constituency, but in the villages and smaller towns there are no alternative jobs. Those villages and towns must get equal and fair treatment from the IDB, compared with the so-called socially deprived areas of Northern Ireland. I ask the Minister of State, in his reply, to confirm that we will get fair treatment from the Government and from the Industrial Development Board, and that we will be not discriminated against in favour of other parts of Northern Ireland.

Mr. Eddie McGrady: Like the right hon. Member for Strangford (Mr. Taylor), I wish to express my appreciation of the chairmanship of Sir James Kilfedder, the former Member of Parliament for North Down. He was a magnificent Chairman and a kind friend. I wish also to congratulate the present Chairman, the hon. Member for Hammersmith (Mr. Soley), who introduced the debate this morning, on continuing the even-handed and productive way of conducting the debate.
The report touches on a wide variety of aspects of employment creation in Northern Ireland. It would not be possible in a few moments even to consider one facet of it in any depth. Employment creation is a multi-faceted problem, and even the in-depth discussions that the Select Committee has had only touched on some of the factors that contribute to employment creation and unemployment.
During the inquiry into employment creation in Northern Ireland, we had the outbreak of peace. That created a new dimension and a new era for the prospect of employment creation—one that of course we all welcome very much. It will make the job of the employment-creating agencies that much easier to pursue.
The outbreak of peace also had a further dimension, in that it enormously increased the expectation of people for a better way of life in Northern Ireland. The absence of violence has achieved that already, but other aspects of a better way of life include the social ones of a house and a reasonable job. The housing problem in Northern

Ireland is reasonably under control at the moment, but unemployment is not. Unemployment is still the greatest scourge that we have suffered in my memory.
When I talk about employment, I mean employment with good conditions. I do not mean employment in a low-wage economy, in which the unemployed, because of their availability, are at the mercy of the would-be employer, whether indigenous or an inward investor. We should sell Northern Ireland not as a low-wage economy, but as an economy that has a very highly educated and skilful work force. We should sell it as an area where the highest quality of training can be provided in the shortest possible time, and where efficiency and quality make up for deficiencies in foreign products. We should not concentrate on being a low-wage economy, but be able to compete on the international stage in efficiency and quality.
Much has been said in the past few years in Northern Ireland about fair employment, and legislation is currently in place and being reviewed to see whether it has the intended effect. There is a problem not only with the allocation of jobs, but with the location of jobs. That was mentioned by the right hon. Member for Strangford. He listed, quite rightly, some of the horrendous losses that have occurred in the recent past, including some in my constituency. I could not help but think as he spoke that, in my constituency, we could not have big losses because we did not have the jobs in the first place.
An article in the local newspaper, the Down Recorder, last week gave the statistic that in the past decade, between 1985 and 1995, the number of unemployed increased by 40 per cent. When my constituents read the headlines about the peace dividend and a job bonanza, they wonder where those jobs will go. We are fairly certain that none of them has gone to south-east Ulster between Strangford Lough and Carlingford Lough. In that 10-year period, not one single inward investment job was created in that area. I could repeat the same sad story about infrastructure, which has also been totally neglected in that area. No inward investment jobs have been created in the area and there has been no job bonanza. That is not my interpretation of what I see around me, but the statistical results in parliamentary questions that prove beyond doubt what I am saying.
One can adopt one of two attitudes to the problem. The first is to say that it is an accident of history; the other is that it is the result of deliberate policy. One of our local newspapers this morning carried an article about how the inward investor Sanchez (UK) Ltd. has been treated. It was to come into the area of Warrenpoint, where there is considerable unemployment. I do not know whether the problem was intentional or simply due to inefficiency.
Down district, which I represent, has the second highest unemployment among the nine council areas surrounding Belfast. We have severe infrastructure problems, too. In South Down, the ferry that plies between Portaferry and Strangford is a disgrace; it will not sustain economic trade between the two areas. It was out of action for several days last week and it continually breaks down.
I do not mean to be a dog in the manger, but we need a new approach to job creation and to the areas in which effort is concentrated.
One of the great disadvantages from which areas such as south-east Ulster suffer is that they are always included in Government statistics in the Greater Belfast


travel-to-work area. In fact, unemployment statistics vary from 6.8 per cent. in Strangford—the lowest in Northern Ireland—to 22 per cent. in other areas. So the inclusion of high unemployment areas in the Belfast travel-to-work area statistics completely distorts the unemployment figures. It also means that areas of multiple social deprivation are not highlighted; they are merely camouflaged in the overall picture.
I ask the Department to provide proper statistics, broken down into the natural units made up of the communities of Northern Ireland. I would also suggest a greater element of partnership between the Government, the job-creating bodies and the vibrant local industrial development bodies working with the local councils. That would be an invaluable and fruitful process.

Mr. Thomas McAvoy: My hon. Friend consistently gives the impression that the job-creating agencies run by the Northern Ireland Office seem to neglect the peripheral areas outside the Belfast conurbation. Has he detected any improvement in their attitude recently?

Mr. McGrady: Since the Committee's report to the Government and to the House, I have detected no change whatever. Of course I can speak only for my own area, but I believe that other areas are in the same situation. We seem to be recreating the Pale of the 16th and 17th centuries—this time not around Dublin, but around Belfast. Into this new economic Pale all good things go and nothing emerges for the peripheral areas.
I also suggest that indigenous and inward investment incentives be graded and geared to provide more jobs near the areas of greatest deprivation. After all, that can be done in Scotland, Wales and the Republic of Ireland, so why cannot it be done effectively in Northern Ireland? We also need a redefinition of the so-called priority areas, to ensure that the real unemployment blackspots are more effectively helped by making them more attractive to investors. There is nothing to be ashamed of in providing jobs for those areas.
The not-so-new policy of the Industrial Development Board and LEDU—the Local Enterprise Development Unit—of concentrating on developing companies with an exporting orientation is fine as far as it goes, but it does not help if a constituency has nothing to develop in the first place. It is impossible to develop the export sector, or the research and development sector, of industries in places where there are no industries. I therefore say that the IDB and LEDU must act more assiduously to create the economic conditions that will attract grant aid and make those places more attractive generally.
I am talking about a change of tactics, a change of the grant aid structure and a change of the policy guiding industrial development—especially inward development.
The right hon. Member for Strangford referred to trade with the Republic which, as he stated, is running at only 5 per cent. of our total trade. The right hon. Gentleman seemed to take some delight in that fact. I take no delight in it; it is a scandal that the two parts of Ireland are not trading much more to their mutual benefit.
I cannot close without first mentioning the 25 per cent. budget cut for the Training and Employment Agency, announced on 11 December last. The effects of that cut

have percolated dramatically down into the action for community employment programme. I doubt whether the Government fully thought through the extent to which the effects would be felt, but the results of the cut for meals on wheels, care in the community, Barnardo's homes, Age Concern and cancer research will be considerable. It is sad that those most vulnerable sectors of voluntary work have been targeted, and that 3,000 jobs are due to be cancelled by a stroke of the pen that came out of the blue on 11 December last.
The irony is that other Government Departments will have to pick up the tab. The services will still have to be provided, if not by the voluntary sector and the ACE programme, then more directly.
No one has yet touched on tourism in this morning's debate, yet tourism development can be one of the quickest ways of creating jobs in Northern Ireland's economy. There have been huge increases in the number of visitors since the ceasefire of 18 months ago, but I do not detect any urgency about providing the much needed infrastructure to accommodate them. I am talking primarily about beds. The policy of the Northern Ireland tourist board seems very confused. Hitherto it has been creating 50-bed hotels, whereas local market conditions dictate a need for much smaller hotels of up to 15 beds. They can be built quickly and be ready, if not for this summer, then certainly for next summer's tourist trade. I therefore urge a radical rethink of that aspect of the board's policy.
Many parts of Northern Ireland, including mine, have never had the privilege of massive job losses because we never had those jobs in the first place. That is an abiding local problem; and if there is any inequity in the approach to solving it, it must be dealt with and eradicated.

Mr. Mark Wolfson: I start by adding to what has been said about the establishment of the Northern Ireland Affairs Select Committee, and about the important role played by the late Sir James Kilfedder. He was always enthusiastic and interested in all who served on the Committee, and was keen to get it off on a sound and effective footing. It is a pleasure to work on the Committee, and the current Chairman, the hon. Member for Hammersmith (Mr. Soley), who opened the debate, has continued the tradition of involving us all in the Committee's work.
My right hon. Friend—I call him that advisedly— the Member for Strangford (Mr. Taylor) spoke of the vigour of the Northern Ireland economy. It has always impressed me that, despite the difficulties in Northern Ireland, those in business there demonstrate such a positive attitude to achieving success for their companies and their economy. The Province provides an extremely attractive life style: it is a good place in which to live and work. I continue to be impressed by all the people whom the Committee meets, and from whom it takes evidence, who are involved in the Northern Ireland community and, in particular, its business life.
The Committee has discussed small firms, and made recommendations. As in many other parts of the United Kingdom, the opportunities for job creation exist largely in the small business sector. Small firms form a larger proportion of the economy per head of population in Northern Ireland than elsewhere, and they are therefore


very important to that economy. A third of those firms are connected with agriculture, and manufacturing also relies heavily on small businesses.
Northern Ireland's small firms are successful in themselves. The Province has a better record in that regard—a record of small business survival, as opposed to a high failure rate—than other parts of the United Kingdom. Small firms have problems, however, many of which relate to the difficulty of raising capital. We made that point in our report. The Small Business Institute had told us of the shortage of venture and development capital for small businesses, and we recommended that the banks should pay particular attention to the evidence that we had received. We felt that they could and should provide more support, within the constraints of prudent banking.
We also focused on the need for training of managers and supervisors in small businesses—a particular interest of mine—and the relationship between such training and the readiness with which banks would lend to small companies. Banks' unease increases if they feel that they are being asked to lend to organisations which may have experienced a vigorous and energetic start-up, but which may be at risk as they grow because management is not trained to handle a larger business. The Government must give all the support that they can to ensure that training opportunities continue to increase.
Cash flow and debt are also problems for small businesses in the Province, as in other areas. I hoped that the Government would legislate to allow those who do not pay their debts within a reasonable time to be fined. There has been considerable controversy about that in the past few days, and it is very relevant to Northern Ireland.
The Committee found that small companies were also concerned about the burden of regulation, which causes them particular difficulties. Large companies have staff to deal with the regulatory framework; they can employ specialists, and they can afford to spend money on ensuring that regulations are followed. The job of small firms with five, six or 10 employees is to secure orders, to ensure effective accounting and, above all, to get the product or service out of the door and to provide customers with what they need. It is frustrating as well as expensive if they have to spend too much time dealing with Government regulation. We appeal to the Government to minimise that burden wherever possible.
The role of LEDU is extremely important to the development of small firms. We felt that some of its procedures were confusing and lacked clarity; we strongly recommended the design of a format for a business plan for small firms that was acceptable and would be used by the multitude of agencies operating under the Government umbrella, often with Government support, rather than the present multiplicity of requirements.
Reference has been made to the importance of inward investment, and the Committee's visit to Korea early last year. We were very impressed by the standing of the Industrial Development Board in South Korea: its work was effective, and has paid off in terms of investment in the Province. The Koreans told us that the board's follow-up work in helping their expatriates to settle in the Province was particularly effective. It is important for managements that are considering inward investment to know that their own people will not be left high and dry, and that help with education and housing, along with advice, will continue to be provided.
It is also important to improve education standards, allied to work requirements, at the lower end of the education spectrum. It was made clear to us that the qualifications and abilities of those leaving university in Northern Ireland were of a high order, and we saw evidence of that; but it was felt that, at the lower end of the spectrum, young people with minimal qualifications found it difficult to obtain jobs, and, even when jobs were available, the qualifications with which they left school were considered inadequate.

Dr. Norman A. Godman: Does the hon. Gentleman share the serious concern expressed to me by many of my friends who work in voluntary organisations in Northern Ireland about the savage cut in the ACE budget?

Mr. Wolfson: Given the importance that the Select Committee attached to maintaining that budget, that cut is regrettable. However, the Select Committee also said that the content of the work needed review. It is important that such money should be spent and focused in the most effective way.
I am pleased to have had the opportunity to make a short intervention in the debate and I look forward to further opportunities in the Select Committee to monitor the work of the Department and how it spends Government money.

Several hon. Members: rose—

Mr. Deputy Speaker (Mr. Michael Morris): Order. I shall call the hon. Member for Belfast, East (Mr. Robinson) next. I emphasise the need for hon. Members, if possible, to attend the whole of a debate.

Mr. Peter Robinson: I shall not make a speech—I shall simply make a few points so that another hon. Member may have the opportunity to speak before the Front-Bench spokesmen.
I welcome the opportunity to comment on the Select Committee's first report. I hope that those who were concerned that the Select Committee might result in some sort of revolution in Northern Ireland now see that it can do a useful job for the people of Northern Ireland. It makes more accountable not only the Ministers responsible for Northern Ireland, but the Departments and the civil servants.
I join other hon. Members in paying tribute to the late Sir James Kilfedder. He played a significant role in the formation and the early days of Select Committee, in particular in the report on employment creation in Northern Ireland. The subject chosen by the Select Committee for its first report was clearly considered to be a priority. I suppose that, as with most Committees beginning their work, the report grew like Topsy. We went wider and wider and ultimately had to draw a line under it and bring it to a conclusion.
The significant factor that formed a backcloth to the Select Committee's considerations was the two ceasefires and the resulting change in atmosphere for business. No one would deny that there was a considerable peace dividend for business in Northern Ireland, although it was not long before we also realised that there could be a significant peace deficit.
Jobs in Northern Ireland attend the violence—glaziers who put in new glass after bombs, the construction industry that replaces buildings, the security firms that guard the companies throughout the Province and, most particularly, the security forces themselves. Jobs would be lost as a result of the peace, just as jobs would be gained. Of most concern was the fact that jobs that would be lost would be lost much quicker than they could be replaced by new ones being brought into the Province. Firms quickly reduced their security levels. Jobs such as those filled by men doing searches at the door were lost instantly and the task of filling the gap was considerable.
During the past few months in Northern Ireland, there has been a new drive and energy not only among those in Government Departments who are seeking jobs but in the business community itself. That augurs well for the future.

Mr. David Wilshire: The hon. Gentleman knows Northern Ireland a great deal better than I do, but can he confirm that I was right during the negotiations to get the impression that sometimes terrorism was being used as the reason for non-investment when peripherality might have been the cause of the problem, and that will remain and will need to be addressed even if the peace process becomes permanent?

Mr. Robinson: Undoubtedly a number of ingredients are to the disfavour of Northern Ireland, and peripherality is one. Members of the Select Committee well recognise that many business men will sit back for a long time in order to ensure that peace has a permanency about it before they invest in the Province.
The hon. Member for South Down (Mr. McGrady) referred to Sanchez. It was a sad fact that a firm considering investing in Northern Ireland was invited to meet representatives of the IDB in a restaurant's bombed out car park. That did not seem a sensible decision. Nor was it sensible to leave them stranded there afterwards. However, putting that to one side, we saw a much more helpful IDB, particularly, as was mentioned, in South Korea. Most of us were impressed by the enthusiasm and commitment of the IDB staff in South Korea—their organisation and personnel left a good impression on the Select Committee.
It would be wrong of me to fail to take the opportunity to point out that no matter how hard the IDB and others may work in trying to bring jobs into the Province, if some of the core jobs in Northern Ireland were lost, the Province would have a difficult time recreating them. I think particularly of Shorts in my constituency. If 1,500 jobs in Shorts were to be lost, it would take the IDB and LEDU a long time to replace them. As economists tell us, a further 1,500 jobs rely on those jobs in Shorts, making a net loss of 3,000. The impact of that would be on such a major scale that the Minister responsible for industry in Northern Ireland needs to be on the ball, as I know that he is. It is vital that the Government do everything possible to ensure that Fokker stays in business in some form and that the contracts are maintained.
One thing that the IDB and LEDU lack is some type of performance indicator that would enable us to see how well the IDB was doing—whether the targets are being properly met and how good is the work rate. I hope that the Minister will address himself to that, if not now, certainly in the future.

Mr. Roy Beggs: Improved cross-border transport and the development of cross-border business and trade are often projected as a means of reducing unemployment in Northern Ireland, but the benefits that will flow to the Province as a whole, and to the Irish Republic, by upgrading the Larne-Belfast road do not receive the emphasis and attention that they merit.
We resent the political decision made some time ago to pour money into the Belfast-Dublin road. That is traversed by only 8,500 vehicles daily compared with 16,000 vehicles through Larne. Last year, 1.9 million passengers travelled through the port of Larne. Cars, caravans and freight transport increased. The relocation of Sealink from Larne to Belfast has not had the dramatic impact that some predicted. That has been largely compensated for by the introduction of additional ferries by P and O.
It is frustrating that higher priority should not have been given to the A8. We do not accept the most recent fudge of all—a suggestion that the Department of the Environment will look into providing passing opportunities along the road. The Secretary of State for Northern Ireland must secure the funding necessary to extend the existing dual carriageway from Gingles corner. That was promised to start in 1997. At the very least, we should complete the dualling to Ballynure where the road diverges and traffic moves towards the airport and county Antrim. It is significant that Corr's corner was the chosen location for Hualon, which may still produce up to 2,000 jobs for us.
I am impressed by the work that has been done by the Select Committee on Northern Ireland Affairs. Its report on employment creation highlighted problems and difficulties but identified the positive advantages for foreign investment in Northern Ireland. The Committee's visit to South Korea was constructive and identified why Northern Ireland is attractive to foreign investors. We must continue to highlight the matters that it identified.
The use of Korean nationals as representatives for the IDB in Seoul has proved itself, and perhaps similar use of foreign nationals should be made elsewhere. The staff there were identified as being very competent. Northern Ireland was perceived by Korean firms as being a good place to invest because of the excellence of the work force and the benefits of close links with the United Kingdom and, indeed, with the European Union, where there are opportunities to market. There are 50 million people in the United Kingdom and 350 million in the European Union, whereas the Irish Republic market is limited to some 3.5 million.
The welcome that is given to overseas people by people from all sections of the community in Northern Ireland was recognised as very genuine, warm and welcoming. Praise was heaped on the IDB for the aftercare provided to new companies, ensuring that there were suitable facilities for their personnel, their workers, and, above all, for the excellence of our education system, with opportunity for the children of those who remain permanently to move on to our excellent universities. The success of South Korean companies in Northern Ireland has opened up a path for other Korean companies to follow. They heard the good news by word of mouth.
I reiterate the tourist board slogan, "You will never know unless you go", and now is an excellent time to do so. With the prospect of permanent peace, I suggest that


similar initiatives by the Chairman and his Committee to visit overseas locations from which we have been able to attract foreign investment could be of great benefit. Will the Minister tell us whether much attention is paid to Select Committee reports and whether it would be a good investment and make good sense to develop cultural and sporting links with South Korea?

Mr. Eric Illsley: On behalf of the Opposition, I should like to associate myself with the remarks made about the late James Kilfedder.
I congratulate my hon. Friend the Member for Hammersmith (Mr. Soley) and the members of his Committee on an excellent report, and I add my welcome to it. I also welcome the comments made by my hon. Friend the Member for Redcar (Ms Mowlam), who has said that the report highlights the crucial need to free unemployed people from poverty traps by easing the transition from welfare into work.
The report is concerned about the level of bureaucracy and lack of openness and co-ordination in Government Departments. It seeks new measures to help Northern Ireland's businesses to develop, market and export their products. It sees the advantages of ensuring that all three and four-year-olds have access to quality nursery education, and it calls for better targeting and monitoring of public expenditure.
There is little time for me to respond to many of the comments made in the report, and I am sorry that some hon. Members have not been called to speak in the debate: given the issues involved in the report, a much longer period is needed to do justice to it.
I shall comment on the rationale behind the report itself: the high unemployment in Northern Ireland, especially long-term unemployment. I appreciate that unemployment is at its lowest level for 14 years, at about 11.4 per cent. The key factor, however, is that some 55 or 56 per cent. of Northern Ireland's unemployed are long-term unemployed—that is, longer than one year— and 23 per cent. of them have been out of work for more than three years.
As a number of hon. Members have said, qualifications are crucial. We are told by the Government that unfilled vacancies are at record levels in Northern Ireland. I take on board the comments that have been made about part-time working, and I shall speak in a moment about benefit traps, but it is obvious that measures should be taken to bring the long-term unemployed back into employment. One such measure is the action for community employment programme. The right hon. Member for Strangford (Mr. Taylor) referred to all-party opposition to the cuts in ACE, and I add my voice to that.
The report reflects on some of the criticisms of the ACE programme: it is short term; jobs last for only one year; the employment offered is sometimes low grade; and it has a limited training aspect. But the programme did address the problem of the long-term unemployed, which makes it all the more surprising that the Government have decided to cut it by some £12.5 million and implement cuts of between 20 per cent. and 40 per cent., despite the fact that the community work programme, which the Government hope will replace the ACE programme, is still only a pilot in three areas. Cuts to the ACE

programme will displace 3,000 placement jobs for the long-term unemployed, and 200 permanent management jobs.
The Government argue that the CWP is a better approach as jobs are for a longer period—three years— and it has an enhanced training element. I remind the Minister that it is a pilot scheme, but the cuts in ACE are happening now. Community programme schemes are chosen according to whether unemployment in a particular area is high, whereas the ACE programme takes a proportion of long-term unemployed in each district, so assistance is spread more widely in the ACE programme. A number of people are on record as complimenting the ACE programme on its success. The Training and Employment Agency is on record as saying that it believes that the ACE programme is one of its most successful.
It has been mentioned that some of the cuts are disproportionate. For example, job placement for the Ulster wildlife trust amounts to 38 per cent., despite the fact that 51 per cent. of participants go on to full-time employment or education. That compares favourably with any training scheme, whether it be in Great Britain or in Northern Ireland. In my constituency, training schemes deliver full-time jobs to some 30 per cent. of people who complete the courses. I suggest that the Government reconsider the cuts, particularly the targeting of resources.
The report highlights the fact that job creation in Northern Ireland is above the average of the United Kingdom or the European Union, yet there is a record number of unfilled vacancies. The right hon. Member for Strangford referred to the high birth rate in Northern Ireland, and the report gives that as a reason why Northern Ireland must achieve a high rate of economic growth, and fill the vacancies.
There is also a benefit culture in Northern Ireland, whereby people will not move from benefit to employment and must be encouraged from long-term unemployment into jobs. The benefit and tax system must adapt to that need. Tax and benefits systems must be in place in Northern Ireland, to encourage people away from benefits and back into secure employment. We have to move away from benefits and poverty traps. One way to do so would be the minimum wage, as proposed by the Labour party. When I mentioned that to the Belfast chamber of commerce recently, it raised no objections, but even that would not make any impact on the number of unfilled vacancies.
The Government's response to the report refers to the Northern Ireland growth challenge. I am pleased that the Government welcome the efforts of the growth challenge, which offered excellent ideas in relation to employment creation in Northern Ireland. They involve a number of private sector companies. It is disturbing to hear the Northern Ireland growth challenge refer to a culture of comfort in Northern Ireland and to the possibility that, unless the peace dividend is properly managed, there could be a gap in its cycle of comfort, as it calls it, which could lead to higher unemployment in the short term.
In the time left available to me, I should like to touch on other issues in the report. I endorse the comments of the hon. Member for Sevenoaks (Mr. Wolfson) on small businesses. Northern Ireland has a high proportion of small firms compared with the rest of the United Kingdom. Paragraph 184 of the report states:
Small businesses … can suffer from a cautious approach to lending on the part of the banks.


Paragraph 189 states:
The largest problem encountered by Northern Ireland's small businesses is that of cash flow, payments and debtors".
It is probably as well that the right hon. Member for Henley (Mr. Heseltine) is not the Secretary of State for Northern Ireland, or small businesses in the Province would be in real trouble. The Labour party is on record as saying that it is considering proposals for statutory protection for small businesses in relation to late payment of debts, and a moratorium law to assist in relation to bankruptcy.
Energy costs are the subject of another Select Committee report. That issue needs to be dealt with. The privatisation of electricity in Northern Ireland has left generators in an unregulated monopoly position, with contracts extending well into the next century—until 2024. There is little likelihood of electricity prices coming down in Northern Ireland until the issue of those contracts—including the gas "take or pay" contract— is dealt with.
On transport links, I take on board Northern Ireland Members' comments on the A8 to Larne. The Province has a high level of academic achievement, both at A-level and at universities. The downside is the number of children who leave school without any qualification. I am pleased that the Government's response to the report calls for measures to improve that position.
I have mentioned the peace dividend. It is essential that the Government carefully manage what is referred to as the peace dividend—about £500 million going into the Northern Ireland economy. I hope that it will continue to be the case that we no longer need to spend as much on security and such matters in Northern Ireland. That money should not simply be removed from the Northern Ireland economy in one go.
I do not have much time to debate tourism, but the report says that it has the potential to create 20,000 jobs. That must be dealt with.
I endorse the report's final paragraph, which states:
The ceasefires, if permanent, are potentially a turning point in the Province's history".

The Minister of State, Northern Ireland Office (Sir John Wheeler): Like the hon. Member for Hammersmith (Mr. Soley), I pay a warm tribute to the work of the late Sir James Kilfedder, who became the first Chairman of the Select Committee on Northern Ireland Affairs. He is remembered with enormous affection in Northern Ireland as a great constituency Member of Parliament. We are grateful to him and to the people who followed him in the Select Committee's chairmanship for their work. We are also grateful to all members who served on that Committee and for the content of their first report. In the time available to me, I shall try to pick up on some of the points that have been raised in this important debate.
The debate has understandably attracted a great deal of interest in Northern Ireland. Consequently, many Northern Ireland Members are present in the Chamber and have sought to speak. Unfortunately, the debate's short duration has prevented many of them from making the

speeches that I know they would have liked to make. It is therefore important that I should place it on record that the right hon. Member for Strangford (Mr. Taylor) was present and spoke and that the right hon. Member for Lagan Valley (Sir J. Molyneaux) was also here, as were the hon. Members for Fermanagh and South Tyrone (Mr. Maginnis), for East Antrim (Mr. Beggs) and for South Antrim (Mr. Forsythe). The hon. Member for South Down (Mr. McGrady) also spoke.
If I may impishly pick up a remark by the right hon. Member for Strangford on the theme of, "They haven't gone away, you know," the hon. Member for Belfast, East (Mr. Robinson) also made it to the debate and made an important speech, with which I shall try to deal. My hon. Friend the Member for Sevenoaks (Mr. Wolfson), who is a sterling member of the Select Committee, also made some valuable points.
In the brief time available to me, I should like to deal with some of the key, important points that have been a theme of the debate. In his role as the distinguished Select Committee Chairman, the hon. Member for Hammersmith raised the important point of better information on research and development in Northern Ireland. I inform him and the House that the Department of Economic Development has undertaken new research on spending on research and development in the Province. The first results are available. That research will be continued and published in future years, so it will not only assist the Select Committee on future occasions, but guide and inform Northern Ireland Members who consider the effectiveness of investment in Northern Ireland's economy.
The right hon. Member for Strangford and others raised the issue of the action for community employment programme, which I should like to deal with early in my remarks because I know that it is of great importance to Northern Ireland's people and to Northern Ireland Members in particular. I fully understand the concerns that have been raised in the debate and I assure the House that my noble Friend in the other place has received similar representations on the matter. She has advised me that she is preparing measures that will help smooth the transition to an ACE programme that is more appropriate to the current economic circumstances. I assure hon. Members that she will announce those transitional arrangements shortly.
ACE, however, was introduced when unemployment was rising rapidly. As we have discussed during this short debate, that position has changed for the better and employment opportunities have markedly improved. We have 7,000 registered vacancies and we must skill the people of Northern Ireland to ensure that they can take up those vacancies. Next year, ACE expenditure will be about £40 million. In total, about £46 million will be spent on schemes for the long-term unemployed in 1996 and 1997.
The theme of the debate has been, to use the language of the hon. Member for South Down, quality and efficiency, and getting the right jobs in Northern Ireland— not merely low-grade, low-paid ones. The hon. Gentleman made an important point, which I link to the ACE programme. The pot of money that is available in Northern Ireland must be effectively used if it is to realise the Select Committee's objective, as well as meet the interests of the hon. Member for South Down.
The right hon. Member for Strangford mentioned the importance of the rural economy. As the Minister with responsibility for finance, I am only too aware of his point. I assure him that I shall consider that matter in my overarching role. He made a sound point. We must not overlook the needs of people in the rural economy. They are being dealt with, but it is important that that should followed up.
The road to and from Larne is for ever etched on my memory. In constituencies in southern England, the campaign is about not having the motorway at one's front door, but in Northern Ireland the reverse is true; everybody, especially in Larne, would like the motorway to end at his front door. The hon. Member for East Antrim

pleaded his case with his usual eloquence, and I hope that the private finance initiative may ride to the rescue and provide in due course investment that would help to solve the problem.
In the one minute that I have left, I shall touch upon another important issue that several hon. Members raised—the question of Fokker and Shorts. I appreciate the importance of the contracts to Shorts, and confirm that Baroness Denton recently met Dutch Government representatives to discuss that subject. Although it is a commercial matter and will have to be resolved by commercial mechanisms, I assure the House—

Madam Deputy Speaker (Dame Janet Fookes): Order. We must now move on to the next topic.

One-day sales

Mr. Gordon Prentice: Thank you, Madam Deputy Speaker, for allowing me to raise an issue of immense concern to my constituents and to many other people throughout the country. In Lancashire, there is a scourge of one-day sales, and people are being comprehensively ripped off by silver-tongued professional swindlers.
Last October, a one-day sale was run in my constituency by William Stephen Beach, of Albert road, Cheltenham. In the previous Session of Parliament, in my early-day motion 1497, I described Mr. Beach as
an unscrupulous and wholly disreputable fraudster and cheat".
Beach was previously a director of Gloucester Fancy Goods Ltd. and J. B. Sales (Gloucester) Ltd., both of which are now dissolved. I believe that he is currently a director of Table Top Marketing Ltd. and Steve's Cash and Carry.
Last October, I outlined Beach's technique. He breezed into the area, having booked venues for his sales at the Great Marsden hotel in Nelson and the North Valley community centre in Colne. He leafleted the immediate area around the venues and conned people into believing that the boxes of goods that they bought contained top-quality merchandise that was bankrupt stock. In fact they were getting cheap shoddy rubbish. Beach then disappeared like a puff of blue smoke, until I tracked him down in Cheltenham.
My constituent, Mrs. Lana Ellerton, ended up with two pillows and a clock that she did not want, and she was typical of many people. She told me that people were put under immense pressure to buy goods.
I was so incensed by what had happened that, last October, I called on the Government to review the law on consumer protection and to find out how it could be more effectively applied. Unfortunately, on 30 October, the President of the Board of Trade told me that the Government had no plans to change consumer protection law as it related to liquidation and similar sales. I sincerely hope that the Government will now reconsider their position, and act.
After the experience with Beach, I called on the local council to ban one-day sales on council-owned premises, telling it that local people were being ripped off and that local traders were losing business to fly-by-night operators. Pendle council voted to ban sales in its properties, but unfortunately it displayed a misplaced generosity of spirit in allowing bookings already in the pipeline to be honoured.
At that stage, enter Mr. Steve Johnson, of 2 Princess street, Blackpool, who for £69.30 booked Barnoldswick civic hall on 23 January for what was described as a public sale. I have a copy of his leaflet, heralding an
Important Announcement
Owing to the harsh economic situation and collapse of many well known companies
there was to be a public sale at Barnoldswick civic centre. Goods advertised for sale included a Kenwood food mixer for £8, a Black and Decker cordless powerdriver for £10, a Super Nintendo for £15 to clear, Philips, Sony,

Panasonic, and other top of the range videos for £30 each, a 2 in Casio television for £10, and electronic personal organisers for £5.
Please come early to avoid disappointment",
said Steve Johnson.
Beat the Recession and get a bargain of a lifetime",
said Steve Johnson.
Definitely no gimmicks, no tricks—just good value … We give 100 per cent. value—Not promises … Guarantee on all goods".
All that was pure fiction.
On the leaflets that were circulated in Barnoldswick there was nothing to say who was responsible for the sale, nothing like the imprint that one would expect on political leaflets to be circulated in a general or local election; they were anonymous.
Steve Johnson knows precisely what he is doing. He is taking good money from innocent people who believe they are getting a bargain that is literally fantastic. People look at the platform piled high with goods, and willingly suspend their disbelief. They think that they will get a bargain. Johnson preys upon those people; like Beach before him, he is an evil calculating cheat and con man.
At the one-day sale at Barnoldswick on 23 January about 80 people turned up, and they left hundreds of pounds lighter in their pockets and purses. They say that they were sold cheap shoddy goods, and that misrepresentation was rife. The quality brands mentioned in the leaflet, such as Panasonic, JVC and Sony, were not there—or if they were they were not sold. They were stage props. If such goods are ever sold, they are sold only to stooges in the audience.
Johnson targeted an area of Barnoldswick for his phoney "star bargains" and "no gimmicks" sale. For obvious reasons, he did not advertise in the local press. That would have given the game away and alerted people to what was happening. Instead, 24 hours before the sale, he distributed a blizzard of leaflets with no imprint, and people duly turned up, wondering what to expect.
The caretaker of the hall, Mr. Lou Farr, told me what happened. About eight people turned up in a clapped-out van. He said that they had southern accents—but that is not a hanging offence; I do not hold that against them. While 80 people clamoured to get in, Steve Johnson and his friends put plastic bin liners over the windows so that people could not look in and see what was happening.
The goods were brought in by the back door and piled high, and at half-past seven the sale started. There were a few sweeteners. Video tapes and cassettes were sold for £1 or 50p. Torches in blister packs that would ordinarily retail for a tenner were sold for £1. After about 15 minutes, the doors to the hall were closed, a couple of heavies were stationed outside and latecomers were told that the sale had started and were turned away.
At that point, Johnson and his team of rogues moved into top gear. He started piling boxes of goods into plastic bin liners, saying that ghetto blasters, toasters and other goods worth £300 were there for the asking, and that he would take only £60 for them. Twenty-seven people fell for it. They bought goods that were not top of the range merchandise but inferior shoddy rubbish manufactured in China, Taiwan and other such places.
The con did not stop there. People who bought goods were told that they could not open their purchases during the sale—only afterwards. They were asked to leave a


blank space for the payee when writing cheques. One victim, my constituent Mrs. Yvonne Farrelly, said that Johnson agreed to take cheques only up to a limit of £100 and if they were backed by a cheque guarantee card, so she wrote four cheques totalling £320 for her purchases. She told my local paper, the excellent, campaigning Barnoldswick and Earby Times:
Don't be ripped off like I was … The hi-fi cost £60 and I am sure in my own mind that the organisers said that it was a CD player. However, when we opened up the box, it only plays cassettes and you can buy the same thing from Argos for just £34 … There are no guarantees in the box or nothing".
Johnson claimed that the goods had guarantees. Mrs. Farrelly added:
I consider it to be a complete rip-off.
She also bought a camera for £60 and told me that it was worth £10. Twenty-seven people bought a cheap clock radio for £10 and were promised that they would get something three times as valuable at the end of the evening. They never did.
Given the fuss that I created in October by drawing the matter to the attention of the House and contacting my local council, I was furious when I discovered what had happened on 23 January. On Sunday, I got in my car and drove from Pendle on the Lancashire side of the Lancashire-Yorkshire border to Blackpool to beard the lion in his den—I was going to have it out with Mr. Steve Johnson—but the shutters of his shop were down and he was not about. I took photographs of his shop, which I have distributed among the local papers, and I tried to telephone him, but the contact number that he gave the council when booking the hall was unobtainable. I suspect that he has not paid his telephone bill and BT has cut him off. The sign outside the seedy, crumbling corner shop off the front in Blackpool from where Mr. Steve Johnson operates says that fancy goods and gifts are for sale and that there is also an adult section.
I want a very bright spotlight to be shone on the swindler Johnson, and I do not want him or his friends ever to be within 30 miles of my constituency. One-day sales always end in tears. People who cannot afford to shell out money, who live on council estates and in poorer areas are targeted and find themselves paying out good money for rubbish.
The problem is not confined to my constituency or Lancashire; it occurs elsewhere and it is growing. Last year, the Financial Times estimated that about 90 such crooks were operating in the United Kingdom. Last year's annual conference of the Institute of Trading Standards Administration was told that fly-by-night operators were of increasing concern, especially in seaside towns.
There is protection at the moment, but it is inadequate and limited. The Trade Descriptions Act 1968, the Consumer Protection Act 1987, the Sale of Goods (Amendment) Acts 1994 and 1995 and the Sale and Supply of Goods Act 1994 are good but they do not go far enough. It is often virtually impossible to track down people such as Johnson and Beach for the reasons that I have already given.
Commercial leaflets, like political leaflets, should carry an imprint of the name of the person organising the sale and the business address and telephone number of the salesman or saleswoman. By law, a sign should be displayed outside the sale's venue explaining the purpose

of the sale—whether it is a liquidation sale or a bankruptcy sale, for example—and again stating the name and address of the sale promoter.
Trading standards officers should be given adequate notice of sales. The North Yorkshire County Council Act 1991 already provides for such notice, but obviously applies only to North Yorkshire, next door to Lancashire. That provision should be extended nationwide. I want local authorities to give Johnson, Beach and other such crooks a very wide birth and not to allow them to hire council premises unless the council is prepared to take out joint liability so that if there were misrepresentation or people were defrauded and the sale promoter could not be tracked down, the council hiring out the hall would be liable.
I am not a single voice crying in the wilderness. The chief trading standards officer of my county council, Mr. J. H. Potts, has been in touch with me. In his letter of yesterday, he says
In my 25 years experience"—
in trading standards—
I have to say that the majority of itinerant traders operating 'rostrum' sales of general goods (rather than the specialist suppliers e.g. textiles pottery, paintings etc or who allow consumers to browse and self select goods) generate high numbers of consumer complaints and often mislead customers into buying shoddy goods at high prices. The Mock Auctions Act 1961 is totally ineffective".
I know that that is true. Mr. Potts says that, although the Act controls "free" gifts, restricted bidding and "reduced" bids, they are
easily evaded by fast-talking salesman.
How true that is. Like me, Mr. Potts wants, at the very least, the introduction of national legislation, and at best, the licensing of all one-day sellers. He reminds me that licensing already operates in the credit industry and for street traders, for example. It must be the right way forward to require one-day wonders to trade fairly.
I hope that I have made it clear that one-day sales are an absolute scourge and that the people responsible for them are loathsome because they target among the poorest people in our communities. I request that the issue not be put to one side as something trivial, but that the concerns of so many people be responded to and that action be taken.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor): I certainly do not think that one-day sales are trivial. I congratulate the hon. Member for Pendle (Mr. Prentice) on raising the matter again. I have listened to his speech with great interest and I am glad to have the opportunity to set out the Government's views.
A one-day sale is, as the name suggests, a sale held on only one day, although the term is often applied to more permanent sales that use similar sales techniques. Generally, the sales are held in public halls, hotels and other such local venues, which are hired for the purpose. Attention is usually drawn to the events by extensive local advertising, which will often take the form of leaflets delivered door to door, although advertisements also frequently placed in local newspapers.
To make such events attractive, most offer fantastic bargains of some sort. Various reasons are given for the ability to offer such bargains. It may be claimed, for example, that the event is a warehouse clearance, or that the goods are stock clearance lines or bankrupt stock.
One-day sales need not, of course, be in any way fraudulent. Some traders offer genuine bargains to the public in this way. Unfortunately, in the past 18 months or so in particular, there have been an increasing number of complaints about one-day sales involving operators who are less scrupulous about the selling methods that they adopt. I am aware that feelings can run high as a result of the way in which many sales are conducted. The practices employed by operators are many and varied.
Essentially, the salesman—who generally conducts the sale from a rostrum like an auctioneer—spends a long time convincing customers of the bargains on offer. A few genuine bargains are usually distributed, although it is alleged that they are often passed to accomplices of the organiser. The salesman builds the atmosphere to a pitch at which customers are persuaded to purchase lots, often consisting of unspecified items, in the belief that they will receive some of the valuable items they were shown or told about earlier. What they receive is generally worth a fraction of what they pay—as was the case with the hon. Gentleman's constituent—and are not the goods that tempted them in the first place.
At a typical sale, the salesman will hook his audience by offering a single item at a modest price—usually around £5. He will suggest that purchase of the item will show that they are genuine bargain hunters. He may even pass disparaging remarks about those not showing what he often calls their good faith in this way.
Often, non-buyers will be asked to leave. After seeing piles of expensive electronic goods practically given away, they are asked to pledge a larger sum for unspecified items.
The salesman might say something like, "I want to see all your hands up now. Who will give me £50 for what's on my mind?" All hands usually shoot up at this point. If they do not, he will affect to give away more bargains. As soon as most customers indicate their willingness to buy, the salesman has reached the point he was aiming at. The money is then collected and goods handed out, but not visibly. They are distributed in black plastic dustbin liners.
The customers will be told not to open the bag until they get home, and they are given various reasons for this—perhaps it would cause too much litter in a crowded hall, or it prevents those who have not purchased from satisfying their curiosity. People usually comply. As soon as the salesman judges that he has squeezed the maximum amount out of his audience, he will close the proceedings and everybody will be quickly ushered out by his heavy accomplices. Anybody returning to complain usually receives short shrift.
Many of the one-day sales that are causing problems have similarities to a mock auction. Organisers of one-day sales, however, are now tailoring their techniques so as to fall outside the scope of the Mock Auctions Act 1961. The Act made it an offence to promote, conduct or assist in the conduct of a mock auction. A sale of goods by way of competitive bidding is a mock auction if various conditions are met. These are: a lot is sold to a buyer at a price lower than his highest bid; or part of the price is repaid or credited to him; or the right to bid for any lot is restricted to persons who have agreed to buy other articles; or any articles are given away.

Organisers of new-style one-day sales are now careful to avoid using the actual techniques that would classify the sale as a mock auction, although they may lead unwary participants to react as if the sale were a mock auction. Publicity literature often emphasises that the sale is not an auction. Goods are no longer given away, but are sold at giveaway prices.
While no statement may specifically be made about the right to bid for any lots unless something else is purchased, there is an implication that that is the case. Prospective purchasers are asked, for example, to show their genuineness by making a small standard purchase and are told that they will not be disappointed by subsequent bargains if they do. Quite often, those not taking part are asked to leave. The salesman conducting the sale will not offer any money back, but may suggest that, on top of any purchase that is made, purchasers will be given other items of great value. 
One-day sales are by no means as prevalent as were mock auctions in their heyday. Although one-day sales take place throughout the country, they appear to be attributable to a comparatively small number of operators. Some are quite permanent sales that use similar selling techniques. These are generally situated at places where the organisers can rely on a constant stream of new customers—for example, at seaside resorts or shopping centres of major cities where tourists are found. Many such sales are held at empty shops without the owner's permission. When the organiser is eventually evicted, he will merely move on to a similar unoccupied shop. 
There is a considerable body of consumer protection legislation that is relevant to one-day sales and it has already been used by enforcement authorities at various times. The Sale of Goods Act 1979 provides that a buyer can expect goods that he purchases to be as described, and of satisfactory quality. There is also the Trade Descriptions Act 1968, which makes it an offence for a person to give—by whatever means—any false or misleading information on a wide range of characteristics of the goods he supplies or offers to supply. 
In addition, the Consumer Protection Act 1987 makes it an offence to give a misleading price indication. Furthermore, if the organiser issues a misleading advertisement and will not withdraw it, the Director General of Fair Trading has powers under the Control of Misleading Advertisements Regulations 1988. Ultimately he can seek an injunction to stop the advertisement. 
In the late 1970s, the Director General of Fair Trading considered the question of one-day sales in detail. He concluded that there was insufficient evidence of economic detriment to support a call for new legislation to control such events, but he publicised the dangers of one-day sales that use mock auction techniques. He advised consumers to be on their guard at such sales. Once enticed by the prospect of a bargain, it is only too easy to be caught up in an atmosphere skilfully created and manipulated by the salesman and to part with large sums of money for items of little value. That advice is as valid today as it was then. The director general has also taken action and given warnings in a number of cases where the law was infringed, using his powers under part III of the Fair Trading Act 1973.

Mr. Gordon Prentice: May I bring the Minister forward to 7 February 1996? A report in today's


Daily Express states that Department of Trade and Industry officials are looking at whether legislation might be needed for one-day sales. Can he confirm in the time remaining to him whether that is the case?

Mr. Taylor: I confess that I have not read the Daily Express this morning, but I can assure the hon. Gentleman that, under my instruction, DTI officials will continue to consider the problem.
Some trading standards departments have suggested, and the hon. Gentleman has today reiterated, that further legislation is necessary to deal with the problem— for example, by amending the Mock Auctions Act 1961 or introducing a nationwide requirement reflecting the provisions of the North Yorkshire County Council Act 1991, to which the hon. Gentleman referred. The Act requires organisers to give 21 days notice of a one-day or occasional sale with a description of the goods for sale and the names and addresses of the organisers, and the name and address of a person appointed to receive and answer complaints about the sale. The organisers must also describe whether the sale is to be held on other days, the extent of the premises to be occupied and an estimate of the number of people who will attend.
One of the deficiencies of public life is that it is impossible to legislate for human nature, particularly when our fellow citizens—acting in good faith and good hope—are being manipulated by the kind of rogues to whom the hon. Gentleman has referred. My officials have periodically discussed the issues raised by one-day sales with trading standards officers, and they will shortly meet the Local Authorities Co-ordinating Body on Trading Standards and other trading standards representatives to review the situation. We shall continue to keep the situation under review.
I hope that that reply confirms to the hon. Gentleman that we are fully aware of the problems that some one-day sales can create. We share his concern, and I believe that the consumer needs to be very wary. I am not at present persuaded, however, that that wariness can be aroused effectively by further legislation.

Burma

Mr. Anthony Coombs: I thank you, Madam Deputy Speaker for the opportunity to raise a subject as important as Her Majesty's Government's relations with Burma. We had a debate in the House on 19 July last year, in which the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) made some significant points following the release of Aung San Suu Kyi from confinement last July.
I am delighted to see present in the Chamber not only the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Richmond and Barnes (Mr. Hanley), but the Under-Secretary of State for Social Security, my hon. Friend the Member for Gedling (Mr. Mitchell), who takes a great deal of interest in this subject. I was told by my hon. Friend the Member for Broxtowe (Sir J. Lester) that he would have been here had his schedule allowed it.
I am not an expert in Burmese affairs, but I recognise a gross human rights violation when I see one. There can be no grosser violation than that of the democratic sovereignty of a country. Burma was turned over in 1990 by the State Law and Order Restoration Council regime. Aung San Suu Kyi's National League for Democracy obtained no less than 82 per cent. of the popular vote in an election, but was promptly prevented by military intervention from taking power. That is as gross an invasion of the sovereignty of a country as a territorial invasion would have been.
We all very much admire the courage of Aung San Suu Kyi and her continuing calls for reconciliation, communication and peaceful protest, despite the provocations that she and her supporters have no doubt suffered. We remember, as did the right hon. Member for Tweeddale, Ettrick and Lauderdale in last summer's debate, that Baroness Chalker, the Foreign Office Minister said in a lecture:
The United Nations charter lays a duty on all of us to promote respect for human rights everywhere.
She merely echoed the slightly more florid tones of President Kennedy when he said:
The people of the world respect a nation that can see beyond its image".
As we have former colonial responsibilities for Burma, I believe that in that context alone, the British Government should, and does, take human rights in Burma seriously.
As the Minister said in the last debate on Burma, rhetoric in such situations is often easier than practical action. One of my greatest frustrations as vice-chairman of the parliamentary human rights group is the difficulty of the international community in giving practical effect to its condemnation of human rights regimes in other countries. I appreciate that there is always a balance between constructive engagement through aid, trade or diplomatic relations and sufficient pressure in other ways. I equally appreciate, as my right hon. Friend the Minister said in July, that caution should be the watchword in our dealings with Burma. We should concentrate on the practical aspects of our good governance policy. My right hon. Friend said:
Aid is a valuable tool in exercising international influence in Burma, and we must be careful that it is used to support reform rather than undermine it."— [Official Report, 19 July 1995; Vol. 263, c. 1644.]


The cautious optimism that then characterised the position of the Foreign and Commonwealth Office has not been borne out by events in Burma since last July.
The SLORC Government would no doubt say that the economy has revived in the past year, during which time, I understand, rice production has risen by 15 per cent. The House should not forget that about 30 years ago Burma was the largest exporter of rice. Some additional foreign investment—one may or may not agree with the wisdom of making such investment, given the Burmese Government's human rights record—particularly from Japan, has resumed. Some political prisoners have been released, although many hundreds, if not thousands, remain in gaol. There has been a ceasefire with 15 out of 16 of the rebel movements that litter Burma, which is an intensely multicultural and multi-racial country.
On at least a formal basis, the constitutional convention continues to meet intermittently. It is at least talking about steps towards democracy, although whether that democracy would meet the requirements of most Members of Parliament must be open to doubt. SLORC has maintained its policy of economic diplomacy—as the right hon. Member for Tweeddale, Ettrick and Lauderdale called it—and has attempted to achieve at least some sort of military stability by economic improvements.
However, as was said recently in the Asian context:
No human being should be asked to choose between bread and freedom.
That is the choice that SLORC puts before the Burmese people.
There is definite and continuing evidence of massive human rights abuses in Burma. There is no freedom of assembly or effective political association. Some, including Amnesty International and the Burma Action Group point to the rising number of political prisoners, despite some releases earlier last year. The International Labour Organisation still points to the significant use of forced labour. Some 80,000 labourers have been forced to work, perversely and ironically, on the preparations for the "Visit Myanmar Year 1996". Those people have been displaced from their villages and taken away from their families and are being used to construct roads and other infrastructure for what the regime hopes will be a newly buoyant tourist industry.
The United Nations human rights rapporteur, Mr. Yakato, has itemised summary executions, torture and forced movements, particularly in the east of the country against the Karen people. I find it appalling that the SLORC regime has decided that it wants a reservation on article 37 of the United Nations convention on the rights of the child. That article prevents the torture of children. The regime has found it necessary to seek a reservation in order to promote its continued hold on power.
A 20-point resolution was drawn up by the United Nations social, humanitarian and cultural committee in December. It deplored continued violations of human rights in Burma. Sadly, on the political front, it appears that the constitutional convention is increasingly being revealed as a declining farce. It was never likely to get off the ground in a substantive way since 600 out of the 700 delegates are government appointed. It proceeds on the assumption that no one who is married to a foreigner, which includes Aung San Suu Kyi, should ever be able to

hold high office. Her appointment as secretary general of the National League for Democracy was specifically not recognised by the SLORC regime.
The constitutional convention also lays down ground rules that most people would regard as profoundly undemocratic for the new constitution. The chairman of its convening commission, General Nyunt, said at its opening session in 1993 that the new constitution would depend upon
the participation of the Defence Services in the leading role in national politics in the future.
If that is not a recipe for a military regime, I do not know what is.
As the convention appears to have descended into farce, it is not surprising that on 29 November 1995 the National League for Democracy, which is led by Aung San Suu Kyi, should decide that it was no longer appropriate to take part. She, rightly, justified its action by saying:
If the League is not allowed to represent the views of the people then why was the election held in 1990"—
and what justification, by implication, is there for continuing to take part in the convention? Despite that, and the provocations that she and her supporters—who, after all, have been the legitimate Government of Burma since the overturned 1990 elections—have faced, she continues to promote dialogue with the existing regime and discourage demonstrations or anything that might be used by the regime to promote renewed oppression of the people of Burma.
I have four questions for my right hon. Friend the Minister about what Britain can do, given the deteriorating human rights and political situation in Burma. Everything that I am going to ask him to do would bolster the position of the legitimate Government of Burma, which is the National League for Democracy, while encouraging dialogue.
First, there is the tricky question of investment and trade, over which there seems to be some confusion about the stance of the British Government. For instance, in 1993, the then Minister for Trade said:
The Government's policy is to provide no specific encouragement to British firms to trade or invest in Burma in view of the current political and economic situation there."— [Official Report, 8 July 1993; Vol. 228, c. 214.]
That is quite categorical and was said only two years ago in a political situation similar to the present one. Yet the Department of Trade and Industry actively encouraged, through the south of England exporters association, trade missions that took place in November and a seminar on, "An Introduction to Burma—The latest tiger club", organised by the London chamber of commerce and industry on 5 December. Other trade missions, involving 37 countries, are being supported by the DTI later this year.
I would have thought that such encouragement is not what Aung San Suu Kyi has been urging on the British Government as constructive disengagement from the regime in Burma. It seems to contradict directly the original position of the British Government. It certainly contradicts the position taken by Daw Suu Kyi when she said that future investment, and by implication improved trading links, between western firms and the Burmese Government and Burma in general would have to "jolly well wait" until there had been significant improvements in human rights and democratic freedoms. A clarification of the Government's position on trade and investment in Burma would be useful.
Secondly, will the Government continue to refuse to recognise any constitution proposed by the SLORC regime through its pet convention on the constitution if it is not specifically approved by the National League for Democracy and Aung San Suu Kyi? To do anything else would be to acquiesce in making legitimate the new regime that overturned democracy in 1990.
Thirdly, will my right hon. Friend the Minister work, through the United Nations, to improve human rights monitoring in Burma to ensure that there will be a constant stream of information so that not only will engagement but the trade and aid that will follow depend on human rights being improved? 
Fourthly, will he ensure that Britain supports the EU's current position that dialogue with ASEAN, the Association of South-East Asian Nations, would be significantly jeopardised if Burma were allowed entry into the ASEAN group of nations on an unreformed basis? 
Finally, it would be right for my right hon. Friend the Minister to say now that Britain would encourage a position whereby any international involvement, particularly on a multilateral basis, with Burma was dependent on the specific agreement, at least in principle, by Aung San Suu Kyi, who is the legitimate leader of Burma. Those steps would bolster democracy in Burma, improve the bargaining power of its democratic forces— which desperately need it—and ensure there was a genuine rather than a symbolic democracy in Burma, symbolic democracy being the sort that the SLORC regime would like to foist on the people. Most of all, those steps would send a signal to the rest of the world that democratic, civilised nations are not prepared to stand by and watch democracy, elections and freedoms being trampled underfoot by regimes such as that in Burma and are prepared to back their rhetoric with substantive, positive action.

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): I am most grateful to my hon. Friend the Member for Wyre Forest (Mr. Coombs) for initiating this debate and I recognise fully the interest of my hon. Friend the Member for Gedling (Mr. Mitchell), the Under-Secretary of State for Social Security, in this subject. He has met me on a number of occasions to discuss issues involving Burma. I must say that the presence of four Ministers and other Conservative Members is in stark contrast to the interest shown by the Opposition. There is not a single Labour or Liberal Democrat Member here to discuss what I regard as a most important matter. Burma is an important country and one that we watch—and have to watch—carefully.
Last July year, in the debate secured by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), I told the House that I warmly welcomed the decision of the State Law and Order Restoration Council—SLORC—to release Daw Aung San Suu Kyi from her long period of detention without trial. I hoped that that would signal a new dawn for Burmese politics and allow Daw Suu Kyi and her party, the National League for Democracy, or NLD, to participate in the creation of a peaceful, prosperous and democratic Burma.
Those hopes have not yet been fulfilled. The much-needed dialogue between Daw Suu Kyi and SLORC has yet to materialise. Indeed, most recently

SLORC appears to be increasing the pressure on Daw Suu Kyi and her supporters. Recent arrests and harassment of NLD personnel are a cause for concern.
Last November, the NLD decided to withdraw its support for the national convention constitutional review process because of SLORC's failure to begin a serious dialogue about national reconciliation, institute genuine multi-party democracy and produce a constitution that could win the support of the people.
The European Union considered it important to reiterate the need for dialogue and to call for a peaceful settlement of differences. We issued the following statement at the time:
The European Union expresses its concern about the absence of open and meaningful dialogue on constitutional reform involving all sectors of opinion in Burma including the NLD recently being forced to abandon the National Convention.
The European Union firmly believes that dialogue will help prevent confrontation and offers the best hope of national reconciliation. We, therefore, call upon the SLORC to engage in dialogue with all Burma's political and ethnic groups and to increase their efforts to achieve national reconciliation and multi-party democracy. At the same time we urge all parties concerned to proceed with caution and to take all possible steps to avoid a return to violence.
That remains our position. We want SLORC to build on the hopes that have been nurtured by the release of Daw Suu Kyi and for there to be progress towards genuine reform.
We will continue to make those views known. As my hon. Friend the Member for Wyre Forest is aware, we have long been at the forefront of international action on Burma and initiated the European Union's suspension of official aid in 1988, an arms embargo in 1991 and a ban on all defence links in 1992. We shall not weaken in our commitment to help forward the cause of reform in Burma.
I have heard suggestions that, for commercial reasons, our support for reform in Burma may be weakening. I know that my hon. Friend the Member for Wyre Forest did not say that, but I certainly welcome the opportunity to rebut such an insinuation. The question of trade is complex—I shall deal with it later in my speech—but let me be clear: our will to see real change in Burma is undiminished, and our support for the reform process is as strong as ever.
I shall cite the latest evidence of that support. At the recent 50th session of the United Nations General Assembly, in New York, we worked closely with other countries to secure a critical resolution on the political and human rights situations in Burma. The resolution urged SLORC to engage in a substantive dialogue with Daw Suu Kyi and other political leaders, including representatives of ethnic groups, as the best means of promoting national reconciliation and the full and early restoration of democracy. I shall take this opportunity to repeat that call on the members of SLORC to take those steps, which are vital to the future of their country and its place in the international community.
My hon. Friend the Member for Wyre Forest mentioned the human rights situation in Burma, as did my good friend the hon. Member for Gedling at our meeting. The Government remain deeply concerned about the human rights situation. The UN resolution addressed some of those concerns by urging SLORC
to release immediately and unconditionally detained political leaders and all political prisoners, to ensure their physical integrity and to permit them to participate in the process of national reconciliation.


It also expressed grave worries about the attacks on the Karen and encouraged SLORC to create the conditions necessary to ensure an end to the movements of refugees to neighbouring countries. That would be conducive to voluntary return and full reintegration of those people, in conditions of safety and dignity.
My hon. Friend the Member for Wyre Forest asked us to monitor the human rights situation in Burma closely. We will continue to do so and to take every opportunity to urge SLORC to comply with UN resolutions and to fulfil its basic duties to all the people of Burma. In particular, I call on SLORC to recognise the right of all Burmese people to participate fully in the political process. That will remain a central objective of our policy towards Burma.
My hon. Friend the Member for Wyre Forest asked about the Government's position on trade with Burma. I said earlier that that is a complex issue. However, the elements of our policy are logical and are not difficult to understand, and I believe that those who are most directly concerned clearly understand it. We do not think that we should cut off trade with Burma. We may be able, through trade, to help to reinforce our pressure for reform. Daw Suu Kyi has not called for a ban on trade to Burma. If there is one thing on which she and SLORC agree, it is that Burma is in desperate need of economic development.
In a recent interview with the BBC, in answer to a question about whether foreign investment and trade will boost growth, Daw Suu Kyi replied:
It depends on how investments are put to use. Those that bring prosperity to the country and the people are one thing. But investments that widen the gap between the rich and poor will never benefit the country".
I cannot but agree with that.
We do not see trade with Burma intrinsically as a bad thing. Furthermore, we believe that, with the exception of defence exports—which are, of course, subject to the European Union's embargo—we have a responsibility to ensure that British companies are kept informed of developments in Burma and are aware of potential opportunities. British firms are anxious to explore the market and to match their competitors. They have requested the support of Her Majesty's Government, and we should provide it. However, we draw the line at any suggestion of funding for projects that have been commissioned by the ruling SLORC. That is why we do not even consider support for major investment projects.
It is worth taking a few moments to clear up some facts about British investment in Burma. Investment is notoriously difficult to measure. Figures that quote Britain as the largest investor in Burma include investments from other countries that are channelled through some of our dependent territories as well as investment from Britain. Because of our history, it is natural that British business should have invested in Burma over the years.
My hon. Friend the Member for Wyre Forest obliquely referred to history. One should beware of figures that may not be representative of current British investment in Burma. The Department of Trade and Industry seminar that was held last December, to which my hon. Friend referred, and the first trade mission, which will be made later this month, are modest contributions to the process of keeping companies informed. Those events provide us with an opportunity to ensure that British companies that have expressed an interest in Burma are made aware of the realities of doing business there and informed of the situation there. Ultimately, it is for the companies to weigh up whether they wish to operate in Burma in the current circumstances.
In view of the political and economic conditions that prevail in Burma, we firmly remain of the view that it is still premature for the Government to provide any bilateral aid that might directly benefit SLORC. That does not mean that we will provide no humanitarian aid to Burma; we are still willing to consider projects that are identified and implemented by non-governmental organisations. As I have said, aid can be a valuable tool in exercising international influence in Burma. We shall continue to discuss the way ahead with our European Union partners.
The European Union agrees that we should reward reform in Burma by providing aid, as long as it is targeted at the grass-roots level and to the people who are most in need. We think that it is vital that SLORC should allow the UN and other non-governmental organisations to operate in Burma. Only in that way will the Burmese people be able to benefit from the help that we all wish to provide.
We must make full use of the weight of our common European Union policy. The European Union has a "critical dialogue" with SLORC that makes it clear that the resumption of normal relations will be conditional on progress in key areas, including human rights, and political and economic reform. We must use the dialogue to accelerate liberalisation and political change to create a prosperous and democratic Burma.
Last July, in the debate to which my hon. Friend the Member for Wyre Forest and I earlier referred, I summarised our current attitude to Burma as cautiously optimistic. Developments since then may have tipped the balance further towards caution. Burma still desperately needs meaningful reform, which will require that courage and common sense prevail. We know that the people of Burma have those qualities, and I believe that Daw Aung San Suu Kyi is perhaps the embodiment of courage.
I have tried to explain what we are doing to advance the process of reform. I continue to hope that the efforts of all those who are working for successful change in Burma will bear fruit. As long as there is an interest in the House about reform in Burma and we continue to remember that, in time the democratic process must prevail and the United Kingdom, the European Union and the United Nations will be able to encourage Burma to return to what it should be: a beautiful country with a great future.

Building (Education Sector)

Mr. Don Foster: Madam Deputy Speaker, thank you for giving me the opportunity to discuss the important subject of the condition of buildings in the education sector. I thank the Under-Secretary of State for Education and Employment, the hon. Member for Chesham and Amersham (Mrs. Gillan), for having agreed to consider very seriously the issues and specific examples to which I shall draw attention.
In the past few days, the media have paid much attention to the Office for Standards in Education annual report. Among many other things, the report highlighted a worrying problem in our schools. Her Majesty's chief inspector of schools said that 2,700 primary schools, which is one in seven of the total, and 800 secondary schools, or one in five of the total, had poor accommodation. He said in his report:
Teachers who lack proper resources or who work in poor buildings experience problems which at best frustrate and at worst defeat their best efforts to do a decent job.
Buildings are in disrepair not only in our schools, but throughout the further and higher education sectors. That affects teachers' and lecturers' ability to deliver education for pupils and students to learn; it also raises vital health and safety issues.
In this brief debate, I shall draw attention to the buildings crisis in the education sector and the Government's persistent cuts in capital allocations and I shall call on the Minister to recognise that there is a growing problem throughout the sector which requires investment rather than cuts. In my opinion, it is somewhat hypocritical of the Government to speak constantly of plans to improve educational achievement while neglecting the fabric of the buildings in which the education is delivered.
The Secretary of State admitted in a letter to the School Teachers' Review Body on 30 November 1995:
Further pressure arises from the continuing needs for essential repairs and maintenance to the school building stock".
Yet this year, on average, English local education authorities received only a fifth of their bid for capital allocation—for urgently needed new buildings and for essential repairs and maintenance work.
In 1990–91, 74 per cent. of Derbyshire's capital bid was approved. That percentage has decreased steadily and this year only 8 per cent. of the LEA's capital bid was approved. Capital spending in real terms on schools is now roughly half its value 20 years ago, and for much of the 1980s was one-third of 1974–75 spending.
In a recent survey that I conducted, it was revealed that £1.1 billion is needed by LEAs in England and Wales simply to make their schools safe for children. Nearly a third of LEAs questioned required more than £10 million each to make their schools safe, and four local education authorities needed more than £45 million to ensure safety in their schools.
One LEA questioned in the survey commented:
£10–15 million would only provide a safe working environment—not necessarily an environment appropriate to the delivery of the curriculum in 1995 and beyond … we estimate the cost of bringing all schools' premises to an acceptable standard for curriculum delivery to be at least £250 million and possibly more.

A survey by the Campaign for the Advancement of State Education, in October 1995, revealed that more than 20 per cent. of English and Welsh LEAs that replied had one or more primary schools with only outside loos.
A survey carried out by the National Association of School Masters and Union of Women Teachers in Haringey found that 55 per cent. of schools in Haringey have problems with leaking drainpipes, drains and roofs, 74 per cent. of schools have uneven or potholed playgrounds and 64 per cent. have visible cracks in walls—though not so bad as the cracks at Oliver Goldsmith school in Brent, where the west wing is detaching itself from the rest of the school, yet despite the problems at that school Brent council's bid for capital allocation for the necessary repairs was turned down.
The problem confronting many schools may best be illustrated by a copy of a letter sent to the Secretary of State that I received from a Mr. Horner, whose daughter attends the Southowram Withinfields junior and infant school in Halifax. It is worth quoting a large extract from that letter:
Only 3 classrooms out of nine are taught in the main building … the other six being housed in temporary classrooms which have been placed in the playground leaving virtually nowhere for children to play in. All the temporary classrooms have damaged walls, two have rotten window frames, one has no toilet facilities at all … the oldest 'temporary classroom' is now 30 years old … is held up with metal props and a central wooden joist has to be fixed across the centre of both classrooms to secure the buildings. This is the classroom my four year old daughter will spend her formative years in in your state education system next year … In the main building … 55 children share 2 urinals and 2 toilets, the window frames are rotten and leak when it rains, the walls suffer from rising damp which ruins displays of children's work, mould grows on the walls and paint and plaster crumbles and falls from the walls. A recent visit from Calderdale Council, who came to see if the building could be redecorated, commented that it would be a total waste of time and money because the building was so 'sick'.
How did the Secretary of State respond? In a letter to my hon. Friend the Member for Halifax (Mrs. Mahon) on 18 December 1995, the Minister said that the bid for the school to be rebuilt had been unsuccessful because the cost of repair would be cheaper than the cost of replacement. That and numerous other examples show how children are at risk in the classroom because of persistent capital underfunding by the Government.
In and around my constituency—in the area of the new Bath and north-east Somerset unitary authority—the local authority's surveyors have identified those repair and maintenance works required in local schools in the immediate future. I have in my hand a 27-page document listing them all. Those immediate repair and maintenance needs total a staggering £7 million.
Some of the most urgent work includes the need for rewiring at Culverhay school, Hayesfield school, Weston primary school and St. Gregory's school. Heating systems need to be improved at Weston All Saints junior school and St. Mary's Roman Catholic voluntary-aided school. Re-roofing is needed at Southdown junior school and Culverhay school and windows need replacing at Twerton Church of England junior school.
All the schools that I have mentioned have numerous other problems that require immediate attention. I have listed only a few; yet this year the new unitary authority received only one third of its capital allocation bid—only £1.5 million compared with the need for repair and


maintenance alone of more than £7 million. It is hardly surprising that one senior officer told me this morning that local government is
not really even scratching the surface".
In Lambeth, a survey carried out three years ago revealed that £26 million needed to be spent on education buildings in the next 10 years. Since then, however, it has been possible to spend only between £2 million and £3 million and the annual capital grant from the Department for Education and Employment this year allocates Lambeth a derisory £363,000. That position needs redressing and, sadly, it recurs throughout the country.
I hope that the three education spokespeople from the three political parties represented on Lambeth council who are to visit the Under-Secretary of State for Education and Employment, the hon. Member for Hornchurch (Mr. Squire), this afternoon will be able to persuade him of the need to tackle the problems of education buildings in their area.
Leaking roofs, overcrowded classrooms and outside loos are, in part, a health and safety problem, but a more widespread and equally disturbing problem is that of schools not even equipped to teach the national curriculum. To teach the national curriculum successfully, very many existing buildings need adapting. Given the current tight restrictions, such changes are rarely possible.
The Under-Secretary of State for Education and Employment, the hon. Member for Hornchurch, admitted:
I acknowledge … that in recent years tight public expenditure survey settlements have meant that allocations available for improvement or replacement work have not been as high as some local authorities might have wished."— [Official Report, 23 November 1995; Vol. 267, c. 872.]
How right he was.
It is therefore perhaps not surprising that the Department seems unwilling to repeat its 1986–87 survey of the school building stock in order to establish the current facts. There was a £2 billion backlog of repair and maintenance work at that time and some suggest that today it is more like £4 billion. According to the 1991 National Audit Office report entitled "Repair and Maintenance of School Buildings", the cost of maintenance is set to rise each year until 2000. Nothing that the Government have done since 1991 suggests that that prediction was wrong.
Instead of spending money to bring schools up to standard, the Government seem intent on deregulating area requirements for teaching accommodation. That could remove a statutory barrier to overcrowded classrooms—perhaps that is what some in the education world understand by a "crammer". A letter from the Parliamentary Under-Secretary of State to the Campaign for the Advancement of State Education also revealed that health and safety regulations on minimum space requirements—which came into force in January this year—do not apply to pupils or to classrooms in schools. So children face larger classes in shabby buildings.
The Minister might also like to consider the situation in further education and explain to students at FE colleges and universities why they, too, face larger classes, fewer books, aging equipment and shabby buildings. This year's Budget hit the further education sector particularly hard.

Last year's plans for capital funding have been reduced by £49 million or 31 per cent. in 1996–97 and the reduction will increase to £100 million or 63 per cent. in 1998–99.
That is a blow to those further education colleges that need to attract students in order to get funding. For example, at the Henry Thornton community education centre in Lambeth the roof is leaking and the matching Further Education Funding Council funds for community education courses are in jeopardy unless the roof is repaired. The 1993 Hunter survey of buildings in the FE sector revealed that expenditure of about £839 million is needed for the first five years of incorporation. It found that many colleges had inherited a legacy of previous underinvestment, with building stock in poor condition and ill-suited to the learning needs of the 1990s.
However, in August 1995 the Association of Colleges for Further and Higher Education assessed the need for capital investment in the FE sector and found that annual investment of about £40 million will be required to provide just the additional capacity and refurbish existing accommodation for the expanded student numbers. Colleges with increased student numbers also face the acute need to expand. Many have particular difficulties because they are old Victorian buildings on cramped town-centre sites, which increases the cost of providing the expansion.
Yet by 1998 the Further Education Funding Council will no longer be able to maintain the equipment allocation at its present level, let alone provide the separate allocation to support building work. Mr. Chris Pratt, principal of Airedale and Wharfedale college in Leeds, said:
There is no doubt we will be forced to severely restrict growth. This … may kill off expansion altogether".
That is just one of the many examples that I could present to the House.
Capital funding in the higher education sector this year has also been severely cut from £347 million to £243 million—a decrease of 30 per cent. That has occurred despite massive rises in student numbers in recent years. The Committee of Vice-Chancellors and Principals made a submission to the public expenditure survey in May 1995 drawing attention to the pressing need for extra funds for buildings and other capital expenditure, including a backlog of maintenance work totalling a mammoth £1.269 billion across the university system as a result of Government underfunding. Some £840 million extra is needed over three years to pay for badly needed spaces in lecture theatres, laboratories and libraries and £133 million is needed to cover the cost of complying with new health and safety regulations. One institution summed up the sentiments of the higher education sector by saying:
The 1995 Budget cuts have come at the end of a long and debilitating process and will have a significant impact on the longer term initiatives that are being pursued".
In its recent letter to the Higher Education Funding Council, the Department simply states:
indicative provision for capital expenditure … has been reduced in the light of Government policy that capital goods and projects should, wherever possible, be financed through private sector schemes in line with the private finance initiative".
In both the further and higher education sectors, the Government's PFI is no shortcut to better educational buildings for all: it is merely a commercial arrangement


which will not appeal to many businesses. As Peter Reader, head of public affairs at Southampton university, said:
PFI firms seem only to be interested in developing leisure facilities, but that's just a small part of what needs funding. PFI is an answer only for a limited area".
That view is confirmed by Sir Christopher Bland, chairman of the private finance panel, who acknowledged that the PFI might be ill suited to non-commercial academic projects. He stated:
An income stream will continue to determine whether it can be a PFI project: the rules do not change".
I was pleased to hear that during a meeting with the CVCP yesterday the Secretary of State agreed to look at the concerns that it has expressed about the PFI. I understand that there may be some developments on that front and they are very welcome.
The Government's new initiative for schools—the school renewal challenge fund, which aims to involve private finance in educational buildings—will not help a great deal. The relatively small-scale school projects that are needed are unlikely to attract private developers. As with higher education, it seems likely that developers will be most interested in projects, such as sports complexes, with an obvious source of outside income. Proposals to use private sector cash are totally inadequate. Children's and students' safety should not depend on the good will of the private sector.
The Government are introducing gimmick after gimmick into the education system, but they will not provide enough money to make schools safe for children. In the age of the information super-highway, school children have to use outside loos and students work in overcrowded, and at times unsafe, lecture halls. Decent buildings are vital if we are to meet high quality educational objectives. Buildings in a poor state of repair have a direct impact on the quality of learning, and failure to provide adequate maintenance eventually results in crisis management. Buildings that are in good repair encourage learning, helping to keep down truancy levels and boost morale. Badly maintained buildings encourage vandalism which, as well as reducing the quality of the teaching environment, increases cost.
I urge the Government to invest in the building stock throughout the education sector. Schools, colleges and universities should be safe and fit places for teachers and lecturers to teach and pupils and students to learn. Safe, adequate buildings are an entitlement and not a luxury. Yet as time passes and underfunding persists, the decay of buildings in the education sector continues. It is time for the Government to halt that decay.

The Parliamentary Under-Secretary of State for Education and Employment (Mrs. Cheryl Gillan): I
congratulate the hon. Member for Bath (Mr. Foster) on obtaining this Adjournment debate on an extremely important issue. It was useful to hear the points that the hon. Gentleman made. I am only sad that there are not more hon. Members on the Opposition Benches— I always thought that education was at the top of their agenda.
The hon. Member for Bath made a number of different points in his characteristically direct way. The common theme that ran through them was that problems are the

Government's responsibility—local authorities, schools, colleges and universities have been starved of the resources that they have sought to put matters right; the world would be rosy if only more money were available; and the taxpayer's pocket has, yet again, to be the source of that money.
I shall respond to the hon. Gentleman with a few plain facts. It might be hard for him to admit this, but the truth is that, during this decade, substantial sums have been directed towards improving and renewing educational buildings. For 1996–97, we have announced record levels of support for capital programmes—just short of £700 million. Add to that the substantial support that we announced for the previous two years and one arrives at centrally available support totalling just short of £2 billion over the three-year period.
The hon. Member for Bath should note that allocations for basic and exceptional basic need are much higher for 1996–97 than they have been in recent years— £6.6 million compared with £2.5 million in 1995–96. That central support is not, as the hon. Gentleman knows, a limit of any kind on spending on school buildings. Local education authorities can, and do, add substantially to the sums available through grants and borrowing approvals by investing capital receipts and funds from their revenue budgets.
We have made it easier for LEAs to do that in a number of ways. For example, for the two years from April 1996, they will be required to set aside only 25 per cent. of proceeds from the sale of surplus assets for debt redemption, as opposed to 50 per cent. as at present. That will mean that more money still will be available for new capital projects. As a result, we estimate that, since 1990, more than £5 billion has been spent on county, voluntary-aided and grant-maintained school buildings.
The hon. Gentleman quoted some historic figures on capital spending. I say "historic" because he had to go back 20 years to find figures that came remotely near to meeting his case. Of course capital spending was higher in 1974. At that time, pupil numbers were much greater and were rising so rapidly that new buildings were needed to accommodate them. A closer look would reveal that history tells a rather different story about what happened next.
Between 1974 and 1979, capital spending on schools fell to less than half the present figure in real terms— and we all remember who were sitting on this side of the Chamber between 1974 and 1979. By contrast, since the Conservatives came to office in 1979, capital spending on schools has increased by some 15 per cent. over and above inflation.
The hon. Gentleman quoted from the annual report of Her Majesty's chief inspector of schools. I scarcely need to add, "selectively". It is perfectly true that the report notes that a minority of secondary schools and a rather smaller minority of primary schools suffer from "some shortfall in accommodation", but it notes also the efforts that have been made—they will continue to be made— to deal with the more serious problems. As the chief inspector states,
common sense would suggest, that effective teaching depends on more than the physical context in which the teacher works".
It is, yet again, the same message—making the best possible use of the available resources is what counts.
In the further education sector, capital funding has risen from £151.8 million in 1993–94 to £159 million in 1995–96. Capital spending, moreover, has shot up since incorporation. Many further education colleges, using their own initiative, have taken advantage of their new independence to raise private finance. To date, FE institutions have raised more than £100 million.
Higher education has, quite rightly, been one of the fastest-growing programmes in recent years. Universities have invested significant sums in their capital assets. The present aggregate level of borrowing amounts to more than £1.5 billion.
The hon. Member for Bath expressed some anxiety about outside lavatories in some of our oldest school buildings. I remind him of something that I am sure he already knows—that it is for local authorities and school governors to set their priorities for capital work on the school buildings for which they are responsible. I do not decide which work proceeds and which does not in local authority schools—LEAs and governors do. The hon. Gentleman should not ask me or my right hon. Friend the Secretary of State for Education and Employment about why some work has been done while other work has not. If the hon. Gentleman wants to know why there are still schools where children have no choice but to use outside toilets, he should speak to his friends in local education authorities. They should be able to give him an answer.
In the case of county or controlled schools, it is up to the LEA that maintains them to decide how high a priority to give such work. If the schools are voluntary aided, such work would be classed as minor, to be paid for from the formula allocation administered by the local education authority. I see that that comes as a great surprise to the Liberal Democrat education spokesman. Minor works and improvement/replacement formulae, and other funding sources—including receipts—have been available to LEAs for some years and it has been open to them to use those sources to meet their priorities. The hon. Member for Bath should ask his friends in local authorities what scope they have for efficiency savings. The hon.

Gentleman should ask also what efforts have been made to address the efficiency savings identified by the Audit Commission.
The Government want to encourage a more imaginative approach to capital funding in schools. That is one reason for my announcement in December that we shall set up the schools renewal challenge fund; we want to encourage better and more prudent use of capital assets. The fund, which will operate for the financial year 1996–97, will assign resources on a competitive basis for the renewal, repair, replacement or improvement of school capital stock. Account will be taken of the urgency of the project, which should provide value for money while levering in an additional element of resources from non-Government sources, particularly through the private finance initiative—which the hon. Gentleman chose to rubbish, without having a great depth of knowledge of the initiative's extent and of its potential for our schools.
Once again, the hon. Member was scaremongering. I want to put this on the record, in plain language that the hon. Gentleman will understand: health and safety is the responsibility of LEAs and governors. Will the hon. Gentleman please understand that our revised premises regulations will maintain each and every standard that bears on the health and safety of our children?
The picture is far from the study in grey that the hon. Member painted. I believe that the hon. Gentleman, behind the rhetoric, knows what we know—that the Government have an excellent record on education spending. He might laugh, but our record contrasts with the policy that the Liberal Democrats promise. To what does that promise amount? We know now. I refer to the education section of a widely circulated document that has the words, "very limited circulation" on the front. It is spelt out as a point of weakness. Liberal Democrats
just want to throw money at education.
I am sorry that the hon. Gentleman's speech confirmed that that document is alive and kicking, and is living in the Liberal Democrat policy unit.

It being two minutes to Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Maastricht Treaty (Convergence Criteria)

Mr. Nigel Griffiths: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent talks he has had with his EU counterparts on the convergence criteria under the Maastricht treaty. [12343]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Malcolm Rifkind): I have regular contacts with my counterparts from other member states, during which we discuss a wide range of European Union issues, including economic and monetary union.

Mr. Griffiths: Does the Secretary of State have regular contact with the Home Secretary, who wrote the foreword to a pamphlet from the Centre for Policy Studies which was published on Monday and which opposes monetary union? Does the Secretary of State agree that economic convergence will cause heavy unemployment and heavy new taxes?

Mr. Rifkind: I have not yet had the pleasure of reading the pamphlet, but I have no doubt that the Home Secretary's comments will be very much in line with the Government's view on that important issue. The whole question of convergence depends on whether there is a real and sustainable convergence of the countries involved. Clearly, such an important issue ought to be determined on the basis of confidence that such a policy would succeed with the objectives that have been laid down.

Mr. Renton: Following that reply, does my right hon. and learned Friend agree that the convergence criteria were drafted by central bankers, but their implementation will depend on politicians who are elected by ordinary citizens? In that context, has he noticed in any recent discussions that his French, German or Italian counterparts think that the criteria should be revised?

Mr. Rifkind: Different views have been offered by different people, but I have noted that the German Government in particular have made it clear that they attach supreme importance to the convergence criteria being satisfied. They have said that they have no intention of seeing any weakening in the convergence criteria, and I think that that is a responsible approach.

Mr. Shore: Are not those convergence criteria just an arbitrary package of deflationary measures designed to achieve an unwanted, federalist objective of a single currency? Is it not time that the Government made plain to our partners in the European Community that we have no intention whatever of burying the pound sterling in a Euro-currency, either in 1999 or on any other occasion?

Mr. Rifkind: The existence of the convergence criteria is a recognition that it is crucially important that the

question of a single currency should be determined on sound economic considerations, and not as a result of any political doctrine.

Mr. Budgen: Will my right hon. and learned Friend explain whether it is his understanding that the third criterion—that we should have been in the exchange rate mechanism for two years before we can move any further towards a single currency—still applies?

Mr. Rifkind: I have heard the view widely expressed that the changes in the exchange rate mechanism since that condition was laid down, and the fact that there is now a wide band between the various members of the ERM, mean that much less value can be attached to that condition than was the case in the past.

Middle East Peace Process

Mr. Burden: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the prospects for peace in the middle east following the Palestinian elections. [12344]

Mr. John Marshall: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the middle east peace process. [12348]

The Minister of State, Foreign and Commonwealth Office (Mr. Jeremy Hanley): The elections which were held on 20 January were a very welcome development. We look forward to the final status talks between Israel and the Palestinians, which are due to begin in May; and hope for a just, comprehensive and lasting peace in the middle east.

Mr. Burden: I join the Minister in welcoming the January elections. Will he join me in congratulating President Arafat on his victory, and in looking forward to the final status negotiations? Will he also join me in urging all parties to show flexibility on all the issues that must be the subject of the negotiations, including the question of Jerusalem?

Mr. Hanley: I am happy to agree with the hon. Gentleman. I pay tribute to those who carried out the recent elections. The very high turnout rebuffed those who rejected both the elections and the peace process. There was a clear and strong desire for democracy among the Palestinian people. While paying tribute to them and to President Arafat's role in the elections, I pay tribute also to Members of all parties in this House and another place who, with great dedication, helped to monitor the elections and reported back to me yesterday on their success.

Mr. Marshall: Does my right hon. Friend agree that, if the Palestine Liberation Organisation failed to deliver the promises that it made in respect of the Palestinian national covenant, that would rightly be perceived as a breach of faith that could destabilise the peace process?

Mr. Hanley: I certainly recognise the difficulties that the Palestinians will face in trying to achieve those commitments, but Chairman Arafat has said that he strongly believes that there is a need to amend the


covenant. My right hon. and learned Friend and I know full well from our recent direct discussions with the Israeli Prime Minister that altering the covenant would probably represent the highest confidence-boosting measure that could be achieved.
Last week, Prime Minister Peres said that he would do all that he could to enable the Palestine National Council to meet. That will probably involve great security risks, and courage will have to be shown by the people of Israel to achieve what I think will be one of the greatest steps towards engendering more confidence in the peace process.

Mr. Janner: The Minister met Prime Minister Shimon Peres last week. Will he now express the view—I am sure that it is shared by us all—that Mr. Peres is a man of great wisdom, courage and persistence who is to be congratulated on all that he has done? Did the Prime Minister tell him that it is his view, as well as that of all parties in Israel, that there can be no question of Jerusalem being anything other than the capital of the state of Israel? In those circumstances, why have the Government decided, apparently to save money, to close the British Council library in Jerusalem? That appears to me a stupid act, particularly at this time.

Mr. Hanley: I whole-heartedly agree with the hon. and learned Gentleman's first point, about the courage and wisdom of Prime Minister Peres. I was most impressed on meeting him—his sincerity shines through.
Our position on Jerusalem has not changed: it is a matter to be determined in the final status talks. It is in the interests of all parties that neither side should do anything to pre-empt their outcome; there the hon. and learned Gentleman and I may part company.

Mr. Batiste: Does my right hon. Friend agree that the peace process should now be bolstered by encouraging economical development in the region? In that context, will he build on the success that the British Government have had in encouraging trade agreements between the European Union and Israel, by taking action to ensure that the Arab trade boycott of Israel withers on the vine as fast as can possibly be managed?

Mr. Hanley: My hon. Friend has it right. The boycott is withering on the vine; I hope that it will be lifted completely. After all, Britain is Israel's third biggest trading partner. I am assured by the Israeli Trade Minister that British business men are no longer put off trading with Israel by the Arab boycott. The guidance given by the Department of Trade and Industry accurately reflects the facts, and we are actively encouraging business men to ignore the boycott.

Mr. Fatchett: May I associate the Labour party with all the comments that have been made about the nature of the Palestinian elections, and the competence and honesty with which they were conducted? We look forward to the continuing development of the peace process through the final-status discussions.
I am sure that the Minister agrees that the key to a comprehensive peace agreement in the middle east is an Israeli-Syrian peace accord. What steps are the Government taking—either individually, or collectively

with other European Union countries—to ensure that the peace negotiations continue and there is a prospect of real peace between the two countries in the next few months?

Mr. Hanley: The hon. Gentleman is right: unless the Syrian track starts again, there can be no lasting peace in the middle east. I was very pleased when, despite the tragedy of the assassination of Yitzhak Rabin, my right hon. and learned Friend the Foreign Secretary took the opportunity to visit Damascus immediately after the funeral, and to encourage the restarting of the Syrian track. It seems that progress is now being made. We welcome the resumption of talks, and will encourage our European Union partners to provide economic underpinning for the peace process.

White Paper on Europe

Mr. Sheerman: To ask the Secretary of State for Foreign and Commonwealth Affairs from which organisations he will invite representations in advance of the publication of Her Majesty's Government's White Paper on Europe. [12345]

Mr. Rifkind: We welcome representations on the inter governmental conference from any organisation with an interest in it.

Mr. Sheerman: Will the Foreign Secretary listen to more views than those of the Euro-sceptic right wing? Does he realise that many hon. Members on both sides of the House are broadly pro-Europe, although we see many faults that must be rectified and many improvements that must be made to the European Union? We are all sick of the increasingly vulgar and dangerous nationalism that emanates from members of the Foreign Secretary's party, both inside and outside Government.

Mr. Rifkind: That would have been more convincing if it had not come from a member of a party that fought several general elections on the basis that it was trying to take us out of the European Union.

Mr. David Howell: The proposal to publish a White Paper is welcome and robust. I fully understand that my right hon. and learned Friend will not wish to give details about the negotiating position, but may I ask him not to hesitate in setting out a strong anti-centralist, anti-collectivist approach to the European Union in the IGC? In particular, will he focus critically and practically—I am sure that he will—on such nebulous concepts as a common foreign and security policy for Europe, and other ideas that those who are less critical of Brussels are all too ready to accept?

Mr. Rifkind: I agree that, on matters such as a common foreign and security policy, it is crucial for Europe—if it wishes to speak in the name of Europe— to do so because of a genuine identity of view, rather than, through artificial means, seeking to impose a consensus against the vital interests of individual member states. If there is genuine agreement on important issues, we can advance British interests by allowing the European Union to speak for the proposals involved; but, when British interests—or the interests of other countries—are at


variance with those of the majority, that must be respected if the European Union is to be true to its basic democratic values.

Mr. Robin Cook: Will the Foreign Secretary consider inviting representations for the White Paper from GKN, which has just implemented the social chapter for its British work force by setting up a works council? Is he aware that its current newsletter describes that as a positive approach? If the Government cannot carry with them even such a generous supporter of Tory funds as GKN, why do they not drop their lonely opposition to the social chapter? Will they never recognise that it is impossible to build up competitiveness by keeping the work force in the dark, and that British citizens are entitled to the same right to know about the future of their companies as citizens of the continent?

Mr. Rifkind: There is an important difference between my position and that of the hon. Gentleman. In my view, the question is not whether it is desirable for GKN to introduce a works council; the question is whether that decision should be made by employers and employees in the company, or imposed by the Government or the European Union. The hon. Gentleman represents a party that wishes to ignore the views of employers and employees in British companies, and seeks to impose a rigid structure throughout Europe, regardless of the damage that that would do to British jobs and prosperity. He cannot escape responsibility for that view.

Mr. Forman: As well as welcoming representations on those important matters, is my right hon. and learned Friend prepared to look again at the need for fuller public information on such questions? These are complicated issues and many of us on the Conservative Benches feel that there is a need for the British Government to take more of a lead in that respect.

Mr. Rifkind: Yes, and that is one reason why we were happy to respond to the views of three Select Committees, both of this House and of another place, and have agreed to publish a White Paper setting out the Government's approach to the intergovernmental conference, which I believe will respond to the reasonable point raised by my hon. Friend.

Special Export Licensing Procedures

Mr. Cousins: To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria his Department has for recommending countries for inclusion on the list of countries for which special export licensing procedures are required; and what plans his Department has to review these criteria. [12346]

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): The list is drawn up in accordance with foreign policy objectives, international understandings or embargoes to which we are party, the non-proliferation credentials of the country concerned and the effectiveness of its export controls. A revised list was published on 19 July 1995 and is printed in the Official Report. The list is kept under constant review.

Mr. Cousins: I have the list of countries with me. It is necessary to stop countries being used as a staging post

to pass on the means of war to unacceptable regimes. Therefore, can the Minister explain why Israel, which we have just been discussing, is included on the list, but well-known and well-established staging posts such as Jordan, Singapore, Portugal and Cyprus are not? Is it that the Foreign Office is still happy to be the kind of mouse that knows that there is a black market in weapons and is not willing to do enough to stop it?

Mr. Davis: The answer is straightforward. I suspect that I shall disappoint the hon. Gentleman. The list covers countries which are of concern across the full range of dual-use goods or are subject to specific embargoes. Other countries may be of concern in a limited fashion and they are dealt with in a specific way related to that limited fashion. If there are particular countries that the hon. Gentleman thinks should be on the list, he should write to me about it.

European Institutions (Accountability)

Mr. Whittingdale: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the accountability of European Community institutions to national Parliaments; and if he will make a statement. [12347]

Mr. David Davis: Within the Council of Ministers, which is the primary decision-making institution in the European Union, national Ministers are accountable to their respective national Parliaments.

Mr. Whittingdale: Does my hon. Friend accept that the existing accountability of European institutions is inadequate and does he agree that that problem is best addressed by enhancing the scrutiny role of national Parliaments rather than by giving any more powers to the European Parliament?

Mr. Davis: I have a great deal of sympathy with my hon. Friend. We must look as a priority at means of improving the democratic accountability of the European Community. The primary focus of democratic legitimacy in the Union is national Parliaments, not the European Parliament. Let me quote the German Federal constitutional court on that point, because it was pretty informative. It said:
The European Union…is a union of democratic states. Where it assumes sovereign tasks…it is first and foremost for the national peoples of the Member States democratically to legitimise this via their national parliaments.
We are actively considering options for enhancing the role of national Parliaments.

Mr. Spearing: The Minister mentioned the importance of national Parliaments and Ministers, but does he agree that accountability of Ministers to the House was not strengthened when, against the unanimous view of the Select Committee on European Legislation, the Government supported automatic referral of any EC document to a Committee Upstairs? Does he further agree that that would not have been so bad but for the fact that several requests from that Select Committee for debates on the Floor of the House have been declined by Her Majesty's Government? Would it not be more in keeping with the protocol to the treaty, which the Government


have supported and signed, if the Government were to pay more attention to the views of the Select Committee, which comprises hon. Members of all views, and if their actions became more consistent with their words?

Mr. Davis: As someone who has appeared before the Select Committee, I think that, from time to time, its scrutiny is pretty ferocious. With regard to paying attention to the Select Committee's views, the hon. Gentleman will remember that I and the Government generally have supported, for example, its recommendation that we incorporate declaration 13 into the treaty, or make it legally binding. That will add enormously to the scrutiny capacity of the House.

Mr. Garnier: Does my hon. Friend accept that the institutions of the European Union would receive greater sympathy, not only in the House but in the country more widely, if they did less but did it better?

Mr. Davis: My hon. and learned Friend quotes almost exactly the motto of the current President of the Commission, Mr. Santer, and we agree with him entirely. The Union does much better, in the eyes of the people of Europe, when it does not meddle in the nooks and crannies of the nation states; when it pays proper respect to the sovereignty of those nation states; and when it carries out legislation to a better quality than has been the case.

Kashmir

Mr. Gordon Prentice: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent steps he has taken to help the Governments of Pakistan and India resolve the conflict in Kashmir. [12349]

Mr. Hanley: We have consistently encouraged both sides to resolve their differences over Kashmir through bilateral negotiation. It is not for us to prescribe a solution, but we are ready to help if both sides ask us.

Mr. Prentice: I thank the Minister for that reply, but can he shed any light on the missile attack on Kahuta, a border town in Azad Kashmir, which took place at the end of January, where the missile landed on a mosque, killing 18 people? Will the Minister also comment on attacks on leaders of the Hurriyet conference? Surely he agrees that it will be impossible to move forward to a peaceful resolution of the continuing conflict in Kashmir unless the perpetrators of those outrages are identified and brought to book.

Mr. Hanley: I agree with the hon. Gentleman's horror at the incident concerned. We regret very much the loss of life and continue to urge restraint on both sides. We would expect the United Nations military observer group in India and Pakistan to report to the Secretary-General in the normal manner on the exact circumstances. It may help the House if I repeat briefly what we believe the best way forward on Kashmir should involve. There should be simultaneous progress on dialogue between India and Pakistan, as provided for under the 1972 Simla agreement; an improvement in human rights in Kashmir and a genuine political process there; and a clear cessation of external support for violence in Kashmir.

Mr. Colvin: Bearing in mind what my right hon. Friend said about the Simla agreement and his earlier

remarks about Britain's willingness to help, if both parties—India and Kashmir—requested it, would Britain be prepared to chair and mediate such talks under the Simla agreement umbrella? As Pakistan is once more a member of the British Commonwealth, does he feel that the Commonwealth has a role to play in trying to find a solution to this on-going problem?

Mr. Hanley: I know that our wish for a solution to the dispute is shared by all members of the Commonwealth. As I said before, it is not for us to say what the solution should be, but we are—I confirm this to my hon. Friend— ready to consider any help that is asked for, as long as both sides do the demanding.

Mr. Watson: The Minister betrayed, in his response to my hon. Friend the Member for Pendle (Mr. Prentice), the narrowness of the Government's approach when he talked of "both sides". He then said, in answer to the hon. Member for Romsey and Waterside (Mr. Colvin), that it was not for his Government to decide what the outcome might be. Does he accept that there is not simply a choice between the Governments of Pakistan and of India, and that approximately 12 million Kashmiri people may decide that independence is the appropriate road? Will he ensure, when he discusses with the Governments of India and of Pakistan, that independence is included in the discussions, and that, should there be a referendum, independence is one of the options?

Mr. Hanley: Of course we recognise that finding a solution will not be easy, but we shall continue to urge both countries to try to resolve their differences through peaceful negotiation. I add that, unless both countries agree with any solution, there will be no peace.

Mr. John Carlisle: Apart from advice on how to win their matches, has my right hon. Friend offered any advice to the England cricket XI who are now in India for the world cup competition on their security, bearing in mind the fact that the Australian and West Indian sides have already said that they are not prepared to play in Sri Lanka? Is he worried about the situation, or are they safe?

Mr. Hanley: My hon. Friend's love of cricket is the highest in the land. We are not aware of any specific threats to England's cricketers or supporters, but our high commission in Islamabad and our deputy high commission in Karachi are in close contact with the England team and the world cup organisers. In cricket terms, I think that the threat is to the Pakistani cricketers.

Iraq (Sanctions)

Mr. Dalyell: To ask the Secretary of State for Foreign and Commonwealth Affairs what is his latest assessment of the consequences of UN sanctions on Iraq. [12350]

Mr. Hanley: UN sanctions are designed to ensure that Iraq fulfils the Gulf war ceasefire terms. The strategy appears to be working. Iraq has recognised Kuwait and the UN-demarcated border and agreed to participate in discussions with the UN, which we hope will result in


Iraqi acceptance of UN Security Council resolution 986. That would greatly help to alleviate the suffering of the Iraqi people.

Mr. Dalyell: On sanctions, how is it right that Ministers criticised by Sir Richard Scott should have seven days' notice, and that civil servants apparently criticised by Sir Richard Scott should have no days' notice? Sauce for the goose should be sauce for the gander.

Mr. Hanley: I am grateful to the hon. Gentleman for showing his normal courtesy in giving notice of his supplementary question. Unfortunately, that was not it. I therefore suggest that he waits for the statement next week and that, if he has any further questions, he waits for his Adjournment debate tonight.

Mr. Dalyell: On a point of order, Madam Speaker. In view of the unsatisfactory nature of that reply, I shall raise the matter on the Adjournment this evening at 10.15 pm.

Mr. Bill Walker: Does my right hon. Friend agree that, as long as Saddam Hussein and his military junta are in control in Iraq, the middle east peace will always be fragile, and that that is why we must continue to take whatever action is deemed necessary to contain that instability?

Madam Speaker: I am sorry; it was remiss of me. The notice given by the hon. Member for Linlithgow (Mr. Dalyell) brings this question to an end. I therefore cannot ask the Minister to respond.

Bosnia

Mr. Winnick: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his United States and European counterparts over the discovery of mass graves of victims of mass murder in Bosnia. [12351]

Mr. Rifkind: I am in regular contact with my United States and European counterparts about implementation of the peace agreement, which obliges the parties to co-operate fully with the international war crimes tribunal, including by giving it unrestricted access to all sites and persons. We strongly support its work.

Mr. Winnick: Is it not clear that some of the mass graves so far discovered in Bosnia are only one sign of the appalling crimes and atrocities carried out, in the main, on the instructions of the Serbian warlords and, in particular, following the capture of Srebrenica last July? Is the Foreign Secretary aware that the international community and IFOR have an obligation to ensure that all the people held responsible for war crimes in former Yugoslavia—yes, including the parts not controlled by the Serbs, although most people would agree that the bulk of the crimes and atrocities were carried out on the Serbian side—are brought before the international war crimes tribunal? What efforts will be made to ensure that that happens?

Mr. Rifkind: So far, 45 Serbs and seven Croats have been indicted as alleged war criminals. IFOR has clear

instructions to detain any individuals indicted by the tribunal should they be encountered during operations and, if they are apprehended, to transfer them to the tribunal.

Sir Patrick Cormack: Does my right hon. and learned Friend agree that it would be a grotesque paradox if octogenarians were prosecuted for war crimes in this country and the people responsible for the appalling atrocity just mentioned were not?

Mr. Rifkind: I do not find it necessary to make a comparison. I would simply say that the people who have been indicted as war criminals should, if it is physically possible, be brought to trial on the charges that they face.

Mr. Menzies Campbell: Does the Foreign Secretary recognise that public support for NATO forces' presence in former Yugoslavia is largely based on the natural revulsion of this country's people at ethnic cleansing? If that support is to be maintained, should not NATO be giving the utmost active support to the people investigating war crimes, including securing evidence and taking steps to apprehend war criminals?

Mr. Rifkind: NATO is indeed giving active co-operation. IFOR will conduct aerial reconnaissance over the region as well as foot patrols. It will seek to assist the war crimes tribunal with regard to any evidence of, for example, war graves that might be linked to prosecutions that are being brought by the tribunal.

Lady Olga Maitland: What consultations has my right hon. and learned Friend had with NATO representatives regarding the protection of the mass graves as they come to light? Is he aware that unless the graves are protected, evidence may be covered up, and the perpetrators of those atrocities may never be brought to justice?

Mr. Rifkind: I agree with my hon. Friend. Although on occasions it will be difficult, every effort needs to be made by those in Bosnia-Herzegovina to ensure that any graves discovered are kept in a condition that will enable them to be properly investigated, so that any further evidence of war crimes can be properly established.

Mr. Robin Cook: The Foreign Secretary will be aware that the Red Cross has today confirmed that more than 3,000 people were killed following the fall of Srebrenica. I am sure that he will agree that such appalling atrocities underline the fact that there can be no prospect of reconciliation in Bosnia until those responsible for such slaughter are brought to justice. Will he therefore consider whether there could be a more proactive role for IFOR in apprehending suspected war criminals? In particular, does he agree that it would be unsatisfactory if only the lower ranks of the Bosnian Serb army were charged, while the high command such as General Mladic escaped arrest?

Mr. Rifkind: I have no reason to believe that any such distinction is made by the war crimes tribunal. As the subject of co-operation by IFOR has been raised, I should mention the fact that Judge Goldstone, who is in charge of the war crimes tribunal, has said that he is satisfied with IFOR's response to his request for co-operation. Clearly if he were not satisfied and had specific proposals, we would


be very sensitive to any request of his. But he is satisfied that he is receiving all the co-operation that he requires from IFOR at present.

Mr. Ian Bruce: I am sure that my right hon. and learned Friend will have noted that, judging by the comments from both sides, the House believes that war criminals should be prosecuted. Does he agree that international law has been so abused and flouted in this case that we must send a clear message that in any future conflict such behaviour will not be tolerated by the world community, that action will be taken, and that war crimes will not simply be brushed under the carpet in the interests of bringing people back to peace?

Mr. Rifkind: Yes, it is salutary to realise that although we all appreciate the horrors of war, sometimes in war actions are performed which go even beyond the normal atrocities that are expected in wartime. Where that happens, and where there is evidence pointing to the guilt of certain persons, it is right and proper that the international community should have a structure for apprehending such persons and bringing them to justice.

UN Peacekeeping Operations

Mr. O'Hara: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the financing of United Nations peacekeeping operations. [12352]

The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): United Nations peacekeeping operations are financed by contributions from all UN member states, levied according to a scale of assessments. We attach importance to prompt and full payment of assessed contributions by all member states.

Mr. O'Hara: Does the Minister think that the United Nations has a peacekeeping role to play in the sovereignty dispute between Greece and Turkey over the island of Imia, in the Aegean sea? Or does he accept, as has the Government of France this week, that sovereignty over the group of islands was clearly determined by the agreement between Italy and Turkey in 1932, and by the Paris peace agreement of 1947, whereby sovereignty was transferred to Greece? Does he agree that it is neither lawful nor helpful for any one state unilaterally to abrogate such agreements and that, in the words of the time-honoured diplomatic dictum, pacta sunt servanda?

Sir Nicholas Bonsor: I am grateful to the hon. Gentleman for giving me notice of his supplementary question, and even more grateful that he stuck to it. I am especially grateful because I must confess that I had to get help in translating the Latin tag, which apparently means that treaties should be honoured. I entirely agree with the hon. Gentleman in that sentiment. However, in the dispute between Greece and Turkey over the small and uninhabitable island of Imia, the question of sovereignty has not been resolved. It is for the parties to the dispute to resolve it peacefully between themselves. I am deeply concerned by the actions that have been taken so far, and I believe that today there is a threat of more military action. It is very important, not least to NATO, to which both those countries belong, that the problem be

solved peacefully. In due course the United Nations may have to play a part, but at the moment I hope that the two parties can sort things out themselves.

Mr. Anthony Coombs: Does my hon. Friend agree that one way to reduce Britain's £27 million a year contribution to the peacekeeping force in Cyprus, which would also, more importantly, work towards reunifying the island, is to adopt a demilitarisation proposal? Is he aware that such a proposal has recently received the support of the United States Senate? Does he agree that that would go a long way to solving some of the problems between the two communities?

Sir Nicholas Bonsor: It is extremely important that a solution for Cyprus is found. I am not sure whether demilitarisation will prove to be the panacea for something that has taken us so long to try to resolve, but it is certainly worthy of our close consideration.

Mr. Tony Lloyd: Will the Minister confirm that, even as this House is sitting, the United Nations is in a state of financial crisis, the peacekeeping budget is being raided to fund the UN's general operations and the entire organisation is virtually on the point of collapse? What pressure will the Government bring to bear on Governments such as the United States whose outstanding UN bill is enormous? Will the Government specifically support Boutros Boutros-Ghali's call for an extraordinary emergency meeting of the General Assembly to discuss the reform of UN finances?

Sir Nicholas Bonsor: I entirely agree with the hon. Gentleman that the state of the United Nations finances is disastrous and must be sorted out. At the moment, the UN is owed about £1.7 billion of its peacekeeping budget, of which £816 million is owed by the United States of America. A further £580 million or so of the UN's general budget is owed. That is an intolerable burden and must be sorted out. Under the European Union, Great Britain and France have put forward four proposals to try to solve the problems. They are: first, to tighten penalties on non-payers; secondly, to accelerate repayment of arrears; thirdly, to reform the scales of assessment; and, fourthly, to tighten control of UN expenditure. If the EU initiative succeeds, it will not be necessary to hold an extraordinary general meeting. Unless some action is taken in the next few months, the United Nations will face a financial crisis, which could threaten its future.

Dr. Twinn: Does my hon. Friend accept that the dispute in the Aegean is not only about a single uninhabited island but is a wide-ranging dispute, which if allowed to get out of hand would have grave consequences for peace in the region? Does he further agree that Turkey has given no good reason for abrogating its international agreements, which have held for more than half a century, and that it should return to honouring what it has honoured in practice for 50 years?

Sir Nicholas Bonsor: I certainly agree with my hon. Friend that the dispute in the Aegean threatens world peace. The prospect of two NATO nations on the eastern flank of NATO coming so close to major conflict must cause us all grave concern. I do not share my hon. Friend's view of the merits of the case. It is far from


clear whether Turkey or Greece is responsible. Indeed, we should be concentrating not on that, but on the need to find a peaceful solution to the settlement. We should get involved not in the merits of one side's action or the other's, but urge them to negotiate a peaceful solution and not fight each other over that ridiculously small island.

United Nations (Reform)

Ms Corston: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's proposals for reform of the United Nations. [12353]

Mr. Rifkind: Britain has been at the forefront of recent efforts to reform the United Nations, producing initiatives on restructuring and improvement in many areas and on tackling the organisation's serious financial crisis.

Ms Corston: What are the Government doing to improve and extend the capacity for preventative diplomacy in the United Nations? Does the Foreign Secretary agree that swift action must be taken immediately to prevent the escalation of killings in Burundi and ensure that those responsible for violence and massacre are brought to account?

Mr. Rifkind: I agree with the hon. Lady that preventive diplomacy must become a more frequent aspect of the UN's activities. With regard to Burundi, the United Kingdom is at present chairing the Security Council and we have invited the Secretary-General to develop further his ideas for anticipating problems that might arise, so that any steps that could responsibly be taken at this stage to minimise the risk of collapse within that country can be taken now, rather than allowing the UN simply to react to events as they occur.

Mr. Cyril D. Townsend: Does my right hon. and learned Friend agree that Britain's initiative a few years ago in calling a special meeting of the Security Council to examine the reform of the UN was one of the best things that had happened for some time in the area? Is he also aware that the planning of peacekeeping operations is remarkably amateurish and inefficient? What new proposals is Britain putting forward on that front? Does my right hon. and learned Friend support the Canadian proposal for a small standby force to be available to the Secretary-General?

Mr. Rifkind: The United Kingdom has been at the forefront in making practical suggestions for improving the UN's ability to deal with the huge increase in peacekeeping activities that has occurred since the end of the cold war. I am not persuaded by the Canadian proposal, or by proposals from other quarters, for a permanent standing force, because one never knows in advance what particular military skills are appropriate to an emergency. In Angola and Rwanda, for example, the logistical, engineering and military capabilities of the United Kingdom were required, while an infantry or combat role may be required in other areas. It is better for countries to advise the Secretary-General of the kind of help that they are prepared to give and then to respond quickly if the Secretary-General requires their assistance.

Russian Federation

Mr. Jon Owen Jones: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Russian Foreign Minister to discuss security problems within the Russian Federation. [12354]

Mr. Rifkind: I last met the Russian Foreign Minister at the peace implementation conference in London on 8 and 9 December.

Mr. Jones: Would the Secretary of State care to define what constitutes the legitimate use of force in order to retain the integrity of the Russian empire? Does the indiscriminate bombing of cities and villages form a part of that legitimate use of force?

Mr. Rifkind: The United Kingdom certainly does not support that use of force, and we hope that the Russian Government will seek to resolve their internal problems by a peaceful dialogue and that those concerned with political reform will bring the conflict to an end. That would be far more likely to achieve a lasting solution than a purely military approach.

International Economy

Mr. Bill Michie: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his Department's responsibilities for improving Britain's position in the international economy. [12355]

Mr. Hanley: It is a key Foreign and Commonwealth Office long-term objective to promote and protect British economic interests overseas.

Mr. Michie: Does the Minister agree that the proposed Helms-Burton legislation in the United States Congress is totally unacceptable? Will it not have an adverse effect on the British economy on a world scale? Will it not also be an unjustifiable attack on free trade if British companies which want to trade with Cuba are penalised? If the boot were on the other foot, the United States would never tolerate such interference. What are the Government doing about it?

Mr. Hanley: The Government encourage free trade, but there are certain circumstances in which it is right that it should be restricted to encourage reform. The hon. Gentleman's comments will, I am sure, be heard by the Americans.

Mr. Fabricant: Does my right hon. Friend agree that it is important that we strengthen our business ties not only with EU countries, but with Canada, Australia, New Zealand and the United States? Does he agree that that is important because we have not only a common language, but common business practices and a common English legal heritage?

Mr. Hanley: My hon. Friend is absolutely right. Of course we concentrate on our key markets, but not exclusively so. Commercial work by the FCO now involves some 35 per cent. of all our front-line overseas staff. There are 218 commercial posts in 140 markets, and


14 new commercial posts were opened last year, with an extra 100 staff slots for commercial work overseas. I might add that the United Kingdom is succeeding so well that it now attracts 40 per cent. of all inward investment from the United States and Japan. We must be doing something very right.

Ms Quin: Has not the Foreign Office dismally failed to protect the most useful parts of its budget in the recent budgetary settlement? The valuable work in boosting Britain abroad is being undermined by savage cuts in the British Council and the BBC World Service and we have even seen the withdrawal of funding from the Council of Europe's Youth Foundation. Was the failure of the Foreign and Commonwealth Office to protect all that valuable work the result of right-wing dogma or simply incompetence?

Mr. Hanley: No Government are exempt from their duty to make sure that the national economy of the United Kingdom is improving and ever improving.

Middle East Peace Process

Mr. Luff: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Prime Minister of Israel to discuss the middle east peace process; and if he will make a statement. [12356]

Mr. Rifkind: I met Shimon Peres on 1 February. We discussed the excellent state of our relations with Israel, the welcome continuation of progress towards peace in the middle east, the on-going talks between Israel and Syria and the implementation of the interim agreement.

Mr. Luff: When my right hon. and learned Friend met the Prime Minister, did he discuss with him the excellent state of relations between Israel and Jordan? Does he agree that Syria needs to learn from the experience of Israel that peace is about more than merely the absence of war?

Mr. Rifkind: Yes, I think that is, indeed, the case. Part of the negotiations that are taking place between Israel and Syria are about what the future relations, including economic relations, between Syria and Israel might be in the event of a comprehensive peace in the region. That would offer great prospects for developing the economies of both countries.

Mr. Donald Anderson: Is not one of the most encouraging prospects that of using in other parts of the middle east Israeli expertise in matters such as greening the desert? Will the Foreign Secretary do all that he can to ensure that doors are opened for the interchange of such expertise across the region?

Mr. Rifkind: I believe that that objective is already fully understood and agreed between Israelis, Palestinians and Jordanians. That is one of the most encouraging developments of recent times. Clearly, if the same principles could apply to the other countries in the region with regard to their relationship with Israel, the economic prospects for the region as a whole would be substantially enhanced.

Rev. Martin Smyth: The Minister will be aware that some of us heard a memorable address by Mr. Peres in the Palace last week, in which he was positive about the developments? He reaffirmed that Jerusalem was an open city for all faiths, but he also reaffirmed that Jerusalem was the capital of Israel. Will the Foreign Secretary respond to the earlier question asked by the hon. and learned Member for Leicester, West (Mr. Janner)? Why has the British Council closed its facility in Jerusalem?

Mr. Rifkind: The future of the library in Jerusalem is an internal matter for the British Council. It is not a ministerial decision, nor should it have been. The Government's policy on Jerusalem is that we are entering a sensitive phase with regard to the negotiations between the Israelis and the Palestinians. The British Government, along with many other western Governments, are not considering any change of their policy with regard to Jerusalem because we believe that changes in whatever direction would be unhelpful when these most difficult negotiations are about to begin.

Entry Clearance Procedures

Mr. Rendel: To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to improve the entry clearance procedures for the issue by United Kingdom embassies abroad of visas to foreign visitors. [12357]

Mr. Hanley: Our entry clearance operations overseas are constantly under review to ensure that a high standard of service at all posts is maintained and to make improvements whenever and wherever possible.

Mr. Rendel: The embassy in Moscow asks visa applicants to stay in the street or courtyard outside sometimes for up to a week in sub-zero temperatures. Does the Minister agree that that compares unfavourably with some of our European neighbours, who run an appointment system, which seems a much more civilised way of running a visa application system?

Mr. Hanley: I am aware of the problems at our embassy in Moscow. The week before Christmas I went to Moscow specifically to see the visa operation and authorise alterations which are currently taking place to accommodate people who previously had to wait in the open air. I hope that they will now be under cover. A new visa section, possibly five years down the line, will provide much better accommodation for them.
The main problem in Moscow is the extremely high demand. It has increased by some 300 per cent. in the past three years alone. I understand what the hon. Gentleman says. The conditions in all our embassies should be acceptable to our customers. We believe that they deserve the very best service and that we are achieving that.

Mr. Harry Greenway: Does my right hon. Friend accept that while everyone understands the difficult nature of the work of the immigration authorities he should take note of the difficulties that some people in many parts of the world who may travel hundreds, or even thousands, of miles to present their cases for visas only to fail to get past the door because they are told there that their case
**


does not stand up and it is no good even putting it to the authorities properly? Could some written procedure be established to overcome that sort of misery?

Mr. Hanley: My hon. Friend is right that people often have to make long journeys to have interviews, but we accept written applications and give general guidance, which is not binding but merely tries to be helpful, so that people can decide whether they should take the sort of journey that he mentioned. To put into context the scale of the operation, in the last year for which we have figures, 1994, there were some 20.6 million visits to the United Kingdom. There were 1.32 million applications for visas. Just under 1 million short-term visas were granted. The refusal rate is small compared with the number of visitors who come to our shores. We must ensure that people do not spend time or money, or suffer inconvenience or severe trouble, in getting to a particular post. We must try to ensure that we reduce that problem. I am grateful to my hon. Friend for his suggestion.

Mr. Gerrard: Surely the Minister will accept the point that has just been raised that it is not right for people to be told unofficially that their applications will be refused? Those people do not turn up in the refusal statistics. There is no mechanism for appeal now and the only way that such cases come to light is if those people have relatives in this country who contact hon. Members. People ought to have the right to apply and not to be put off by an official from so doing.

Mr. Hanley: The hon. Gentleman is saying that we should not give guidance to try to help people to reduce the cost and time that they might otherwise experience. He gave the impression that visas are issued only if people contact hon. Members. There were 6,000 contacts with Members of the House last year. We take all the evidence into account before deciding whether a person's visa application is accepted or rejected. It is not right to say that we should not give general guidance, which is a most helpful procedure and welcomed by the majority of people who ask for it.

Mr. Congdon: Does my right hon. Friend agree that many of my constituents suffer disappointment when visa applications for their relatives or parents to visit this country, when they come from Africa or Asia, are turned down? Does he agree that people who get visitor's visas to come to this country and overstay their welcome or disappear do a grave disservice to their fellow countrymen and women because they make the decision-making process that much more difficult for Foreign Office staff?

Mr. Hanley: My hon. Friend is absolutely right. The entry clearance officers, who do a superb job in posts abroad, are trained to a level to which they have never been trained before. They take on their tasks often in difficult circumstances and uncomfortable surroundings very willingly and they try to be as honourable and accurate as they possibly can. Of course there will be certain people who are disappointed, but I can assure my hon. Friend that entry clearance officers use the very best judgment. The entry clearance manager checks all rejections and Dame Elizabeth Anson then considers a scientifically selected random number of rejections to make sure that they are properly carried out.

Middle East Peace Process

Mrs. Bridget Prentice: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received concerning the middle east peace process. [12358]

Mr. Ernie Ross: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the middle east peace process. [12361]

Mr. Hanley: I refer the hon. Lady to the answers that I and my right hon. and learned Friend the Foreign Secretary gave earlier.

Mrs. Prentice: I appreciate the answers that the Foreign Secretary has given already, but does he agree that both Shimon Peres and Yasser Arafat deserve great praise for the continuation of the peace process? Does he share our concern about the shootings of Palestinian children by an Israeli settler at the weekend and will he do all that he can to urge both sides to do what they can to prevent any continuation of such violence?

Mr. Hanley: I thank the hon. Lady for joining in the tributes to Yitzhak Rabin and Shimon Peres. They have been not only honourable but courageous. I would add into that group Yasser Arafat, whose courage is certainly there for all to see. Of course we condemn utterly the violence to which the hon. Lady referred. She is right to be concerned about any continuing violence. Of course it does not help the peace process and, in individual cases, it is a tragedy.

Mr. Ross: Does the Minister share Labour Members' concern about the progress of the Syrian-Israeli and the Lebanese-Israeli peace talks? Will he remind all the parties to those peace talks that the Madrid initiative was called on a land-for-peace basis, which was the platform on which the Israeli Government stood in the elections? In relation to land for peace, will he remind all parties that they should not seek to make any security, geographical or economical gains at the expense of other parties?

Mr. Hanley: I can do no better than refer the hon. Gentleman to the answer that my right hon. and learned Friend the Foreign Secretary gave earlier about the Syrian track. Of course negotiations will have to take place, and compromises may well be necessary which are uncomfortable for one side or the other. However, I believe that good will on both sides can achieve a lasting peace in the middle east.

International War Crimes Tribunal

Dr. Godman: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of the work of the international war crimes tribunal for the former Republic of Yugoslavia. [12359]

Sir Nicholas Bonsor: As my right hon. and learned Friend the Foreign Secretary has told the House, 45 Serbs and seven Croats have been indicted so far. The first trial


of the war crimes tribunal will take place against Dusko Tadic, a guard in the Omarska prisoner of war camp, and has been set for 18 March.

Dr. Godman: Will the Minister confirm that under the terms of the Dayton agreement, all parties will have to co-operate with the tribunal? What if the parties refuse to honour those obligations? Can the Minister say, for example, that sanctions will be imposed against states that give refuge to criminals who have been indicted for crimes in the former republic?

Sir Nicholas Bonsor: As the hon. Gentleman rightly said, all states have a duty to co-operate fully with the war crimes tribunal and to deliver to it the people whom it has indicted. I cannot tell the hon. Gentleman what sanctions, if any, the international community will impose should states refuse to do so; that would have to be extremely carefully considered. It is of great importance that the war crimes tribunal is properly supported by all countries.

Mr. Jacques Arnold: What are the prospects that the really big fish—Mladic and Karadzic—will be brought before the tribunal?

Sir Nicholas Bonsor: It is extremely important that everybody concerned is prepared to honour the duty that each state must deliver to justice those indicted by the war crimes tribunal. Those gentlemen have been so indicted, and they must be delivered for trial.

Mr. John D. Taylor: Does the Minister agree that the Dayton peace conference seems to have failed to address properly the problem of war crimes in Bosnia? Does he agree that those who sponsored the peace conference specifically excluded the Bosnian Serb paramilitaries and their elected spokesmen? Will he confirm that Her Majesty's Government supported that exclusion? Will he also confirm that the exclusion was also agreed by European Union Foreign Ministers, who met in co-operation, and that one of the Ministers who supported the exclusion of the paramilitaries and their elected spokesmen was Mr. Richard Spring, Foreign Minister of the Republic of Ireland?

Sir Nicholas Bonsor: I am not aware that anybody was excluded under the Dayton agreement who should have been indicted by the war crimes tribunal. If what the hon. Gentleman says is true, I think that the exclusion should be reviewed. However, I am not aware that that is the case. As I said to the House earlier, those who have committed war crimes and those who have been indicted by the tribunal must be brought to justice.

Sudan

Mr. Pike: To ask the Secretary of State for Foreign and Commonwealth Affairs what actions Her Majesty's Government have taken in relation to reconvening the Intergovernmental Authority on Drought and Development peace talks on Sudan. [12360]

Mr. Hanley: Britain has joined the friends of IGADD, who are working to support its peace initiative. The friends of IGADD—composed of the United Kingdom, the United States, Canada, the Netherlands, Italy and Norway—have offered various forms of support, including financial support.

Mr. Pike: Does the Minister recognise that the two main factors that have failed to ensure that peace is achieved in Sudan are the overwhelming poverty in southern Sudan and the allegations of human rights atrocities by the northern Sudanese? Will we do everything to ensure that progress can be made on those two fronts so that we can see genuine peace and democracy in Sudan?

Mr. Hanley: I am aware of the facts to which the hon. Gentleman has referred. We continue to be deeply concerned about the appalling human rights record in Sudan and, with our partners in IGADD, we will continue to do whatever we can to help.

Sierra Leone

Mr. Simon Hughes: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the effects on the civilian population of Sierra Leone of recent events; and if he will make a statement. [12363]

Mr. Hanley: We welcome the new head of state's assurance that he intends to maintain the election timetable. We remain convinced that a civilian democratic rule offers the best prospect of peace and prosperity, and we will continue to support the democratic transition and efforts to resolve the internal conflict which has caused so much suffering.

Mr. Hughes: I am grateful for that answer, which I am sure will be appreciated both here and in Sierra Leone. More Sierra Leoneans live in Britain than anywhere else in Europe. Can the Minister make further inquiries of the Sudanese Government about whether they have stopped the appalling atrocities that are occurring, not in Freetown, which is relatively safe, but in rural parts of the country? According to recent information, mutilation, rape and killing is occurring in great severity on a daily basis, and has so far been unreported.

Mr. Hanley: I agree with the hon. Gentleman that thousands of civilians have been killed and that there is evidence of appalling atrocities being committed. Half a million people, between 10 and 20 per cent. of the population, have been displaced internally or are refugees in Côte d'lvoire, Guinea and Liberia. Military expenditure has increased while revenue from taxes, agriculture and mining has dried up. That is a terrible waste and, frankly, no way in which to repair what could be a beautiful country. In the interests of not only right hon. and hon. Members but of the Sierra Leoneans who happen to be in the United Kingdom, we must try to help the country to reach a solution.

Points of Order

Mrs. Ann Taylor: On a point of order, Madam Speaker. I seek your guidance because one of the responsibilities of the House is to hold the Executive to account, but I believe that the House will soon be faced by a situation in which the rights of the official Opposition and of all Back Benchers may be diminished because of the way in which the Government are approaching a certain issue.
I am referring to the report of Lord Justice Scott—a report of more than 1,800 pages, which has taken three years to prepare. We have been told that that report will be published on 15 February. We now learn, however, that the Government have amassed a vast machinery to interpret the report in the way that Ministers wish, at public expense, of course.
The Ministers involved have received copies of the report and they have eight days to find ways of shifting the blame. I understand that the civil servants involved will have just six hours' sight of the report, despite the fact that it affects their careers. Moreover, Ministers have failed to respond to a request from Her Majesty's official Opposition for sight of a copy of the report on Privy Council terms. I ask you, Madam Speaker, what you can do to ensure that Members of the House, and in particular the official Opposition, are not deliberately disadvantaged by the procedures being adopted by the Government.

Madam Speaker: I have listened with great care to what the hon. Lady has said, which I am sure will have been heard, or at least should have been heard with interest and concern in all quarters of the House.
I understand that the Scott report will be presented to the House by the President of the Board of Trade. It is entirely for the President to decide what arrangements, if any, should be made to allow various interested parties to see embargoed copies of the report before it is published, and before any related statement is made in the House.
All I would say is that, in my experience, the questioning on any statement is much better focused when some steps have been taken to enable Opposition spokesmen and minority party spokesmen to have access some time in advance to the text of complicated reports, provided steps are taken to maintain confidentiality. In addition, I think it is helpful for such reports to be made available in the Vote Office for a short period before any statement is made, so that Members generally have a chance to read at least the summary of recommendations or conclusions. But as I have already indicated, this is a matter for the Minister and I have no power to intervene.

Ms Glenda Jackson: Further to that point of order, Madam Speaker.

Madam Speaker: No. There can be no further point of order. I have given a very clear ruling of my opinion on that issue, and we must now leave it at that. I will take no further points of order on that matter. I have dealt with it more than adequately and I have expressed my point of view on it.

Several hon. Members: rose—

Madam Speaker: No.

Mr. Bruce Grocott: This is a genuinely completely different point of order—on the same subject, but a different point of order, Madam Speaker. It relates to the rights of citizens who are civil servants, who, according to all the reports that we have had this morning, find themselves in a fundamentally different position if they are named in the report—

Madam Speaker: I can answer that point of order right away. I have no responsibility for anybody outside this House. I understand what the position may be in relation to others, but I have no authority to intervene. I wish to safeguard the interests of the House and I shall do so, and have done so, to the best of my ability.

Mr. Andrew F. Bennett: On a different point of order, Madam Speaker. Will you confirm that, in matters such as this, it is essential that you as Speaker receive an advance copy of any documents, so that you can ensure that there is orderly procedure in the House? You will be aware that when in the past Ministers have misled the House, personal statements were arranged. Will you confirm that you will have seen a copy and you will be able to arrange for personal statements to be made at the earliest opportunity?

Madam Speaker: Order. I cannot confirm anything of the kind. I have not at this stage seen a copy.

Mr. D. N. Campbell-Savours: On an unrelated point of order, Madam Speaker. Further to my point of order yesterday, would you tell us whether further inquiries have been carried out into the issuing of a pass to Mr. Barry Joseph?

Madam Speaker: Yes. I have carried out further inquiries. I repeat what I said yesterday—that the staff member in question has had a pass, to my knowledge, for some 10 years from the Member concerned. There is nothing untoward in him having a pass from a Member of this House, provided the relevant interests have been declared in the appropriate place. There are no rules, there are no regulations, there are no procedures to prohibit this. It is up to the Member concerned to determine whom he employs as a staff member.

Mr. George Foulkes: On a point of order, Madam Speaker. On 18 January 1983, a predecessor of yours condemned the Government for the selective leaking of, and briefing of the press on, the Franks report before publication. I think that it would be your view that that would apply equally in relation to the Scott report, because there is an indication that there is selective leaking and briefing, to try to brainwash the media in advance of the publication—

Madam Speaker: That is a similar point of order. If the hon. Gentleman will look carefully at my statement, he will see that it is covered there by the word "embargoed".

Mr. Michael Fabricant (Mid-Staffordshire): On a different point of order, Madam Speaker. I notice that we


reached Question 21 today. Is that the first time in your memory that advice you gave the previous day—that there should be short answers and short questions—has actually been taken?

Madam Speaker: No. That is not quite the point. I expected to get to Question 21 today—it was marked on my Order Paper—because the Foreign and Commonwealth Office is particularly good and speedy at answering questions. It is a very good Department in that respect and I am delighted with its Ministers because we always move down the Order Paper very rapidly and very briskly when they are at the Dispatch Box. Is there another point of order? No. What a pity.

Cold Climate Allowance

Mrs. Margaret Ewing: I beg to move,
That leave be given to bring in a Bill to provide for more equitable heating allowances to reflect the increased cost of domestic heating in colder climates; and for purposes connected therewith.
When I curled up in a sleeping bag in one of the rooms in the House of Commons some three weeks ago, I did not expect to be introducing this measure in adverse weather conditions. I neither anticipated nor asked for such weather, although many people will have noticed that the Government's response to this month's cold climatic conditions was much speedier than during the festive season. I refer to the states of emergency that have been declared in Dumfries and in Galloway and to the fact that Ministers have been sent by helicopter—albeit unsuccessfully—to try to deal with the problems there.
Hon. Members will recall that when I first entered Parliament in the 1970s, I argued for the eradication of fuel poverty. When I said that deaths could occur from hypothermia or cold-related illnesses, I was accused of scaremongering and probably shroud waving—as my secretary remarked this morning. We are no longer in that position. The issue cannot be relegated to the category of scaremongering: the hard facts are there for all to see.
Last year 239 Scots died of hypothermia during a relatively mild winter. I note from today's Order Paper that the hon. Member for Rochdale (Ms Lynne) has tabled early-day motion 348, which points out that, according to the Government's own statistics, hypothermia was recorded as the cause of death of more than 300 United Kingdom pensioners in 1994. Each death certificate that attributes death to hypothermia is a blot on the social conscience of all legislators.
The Bill that I am proposing is endorsed by Members of Parliament from all over the United Kingdom. We live in an energy-rich country and no one should die as a result of fuel poverty. The Government will claim that severe weather payments have been triggered this winter and that substantial sums have been paid. That is true, but payment is a lottery. The requirement for seven consecutive days of sub-zero temperatures is ludicrous. A pensioner or a handicapped child living in any part of the United Kingdom may suffer from six days of severe weather, but if the thaw comes on day seven, there will be no payment. Furthermore, the trigger stations that record temperatures often bear no geographical relationship to the areas for which they are responsible.
Severe weather payments are welcome, but they are an imperfect mechanism for dealing with reality. They should remain in place, but I believe that they should be revised and honed into a better system for dealing with exceptional weather conditions. My Bill does not aim at replacing severe weather payments. Instead, it seeks to ensure that there are automatic and continual payments for 17 weeks between December and March, for which those on basic benefits—such as state pensions, income support, family credit and housing benefit—would be eligible.
Opponents of the Bill will say that that would be far too expensive. However, I ask hon. Members what value we place on the lives of our fellow citizens. I believe that we are denying the value of life if we do not address those problems. It is important to take account of the weather


conditions in various parts of the United Kingdom. It is interesting to note that weather forecasters now predict not only the temperature but the wind-chill factor, which is more significant in many cases. I speak with some authority, living as I do in Lossiemouth. Anyone who has visited that beautiful part of my constituency knows that the wind-chill factor can be exceptional, even in non-winter months.
My Bill divides the United Kingdom into four specific zones. Zone 4 covers northern Scotland and would require an automatic payment of £11.15 per week. Zone 3 covers central Scotland, Northern Ireland and northern England—which are suffering just as much as the Borders—and produces a payment of £7.40 per week. Zone 2 covers central England and Wales, and would entail an automatic payment of £3.70 per week. Zone 1 covers the remainder of the United Kingdom. It would not produce an automatic payment—but that would not deny the severe weather payment, which is critical during cold snaps.
I shall explain the reason for zoning. In December 1994, after I had made many attempts to pin the Government down on heating cost allowances throughout the UK, the then Under-Secretary of State for Social Security said in a written reply to me that heating costs varied considerably throughout the United Kingdom. He stated that 23 per cent. extra fuel was required in Glasgow, compared with the southern English comparator, to heat a typical semi-detached house with gas central heating. In Edinburgh, 28 per cent. extra fuel was required. In Dundee, the figure was 32 per cent.; in Aberdeen it was 41 per cent.; in Lerwick it was 53 per cent.; and in Braemar it was 66 per cent. In terms of zoning, those statistics speak for themselves.
My proposals would present the Exchequer with an annual bill in the region of £700 million. The Scottish proportion would be £170 million—a cost that we have included in the dynamic Scottish National party budget. That sum represents less than 6 per cent. of the £3,000 million that is expected to accrue to the Exchequer from North sea energy resources this year alone.
The proposed payments are based on the service charge for fuel that is included in housing benefit. On a weekly basis, the allowances represent 20 per cent. in central and

southern Scotland and 30 per cent. in northern Scotland, including the island communities. The Exchequer could make substantial savings because the national health service would gain if people were unafraid of cold weather. An article in The Independent on Sunday on 14 January clearly stated that
one third of elderly patients admitted to Stepping Hill Hospital in Stockport had reduced the heating in their homes because of fears about the extra costs created by the addition of VAT to gas and electricity bills.
A study conducted in Scotland found that two thirds of elderly people admitted to hospital suffering from hypothermia had heating at home, but did not turn it on. A team of seven senior doctors who undertook research in the west of Scotland estimated that hypothermia results in 4,000 hospital admissions per year. That cost could be eradicated if people felt happy about heating their homes.
The reality is fear—the fear that people cannot heat and eat, that a warm home denies a decent diet, and that people cannot afford a warm home and a decent independent life style. Our fellow citizens should never be subjected to such fears. Phrases such as "social justice" and "care in the community" are more than buzzwords or soundbites—they are commandments.
I greatly appreciate the advice offered by statutory and voluntary organisations to the vulnerable.

Madam Speaker: Order.

Question put and agreed to.

Bill ordered to be brought in by Mrs. Margaret Ewing, Ms Roseanna Cunningham, Mr. Robert Hicks, Mr. Ieuan Wyn Jones, Mr. Elfyn Llwyd, Mrs. Diana Maddock, Mr. Eddie McGrady, Sir James Molyneaux, Mr. Alex Salmond, Mr. Alan Simpson, Mr. Andrew Welsh and Mr. Dafydd Wigley.

COLD CLIMATE ALLOWANCE

Mrs. Margaret Ewing accordingly presented a Bill to provide for more equitable heating allowances to reflect the increased cost of domestic heating in colder climates; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 56.]

Opposition Day

[4TH ALLOTTED DAY]

Rail Privatisation

Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.

Ms Clare Short: I beg to move,
That this House notes with grave concern the very serious allegations of fraud against the management team which has been awarded the franchise to operate the London, Tilbury and Southend rail line; is concerned that this fraud was discovered by British Rail staff only days before the franchise was handed over and would not have been subject to British Rail audit thereafter; believes that this development reveals flaws in the franchising system and the effectiveness of the franchise director; calls on the Government to acknowledge that the process of rail privatisation is costing the taxpayer more for a lesser service, has led to a slump in investment, and is undermining through-ticketing and connections between services; and therefore calls on the Government to halt the process of rail privatisation which is driven by dogma rather than the transport needs of the nation.
It is clear to anyone who has studied the detail of rail privatisation that it is a project driven by right-wing ideology and not by the transport needs of Britain. The Government are willing, at enormous cost to the public purse, to wreak great damage on our rail system and to sell it off for a tiny proportion of its value. The whole process is a madness, driven by dogma and ideological zeal.
Any serious person considering the future transport needs of Britain knows that the country cannot accommodate the projected increase in car use. We must therefore enhance public transport use, and that means that we must improve the quality and reliability of bus and rail. We must get more passengers and freight on to rail.
The nation's needs therefore dictate that we must preserve our national rail network, but achieve considerably higher levels of investment than we have had in the past. The privatisation of rail is producing the opposite. It has caused a slump in investment, and thus we have the disgraceful deterioration of the west coast main line, which is close to my heart because it takes me between London and Birmingham. That line serves a major corridor in the country and it is deteriorating greatly.
Investment in rolling stock has slumped, which means, tragically, that the Asea Brown Boveri carriage works in York will close. That will make hundreds of skilled workers redundant, and there will be further redundancies at ABB in Derby. Jobs will be lost and Britain's manufacturing capacity will be reduced. One hundred trains, worth nearly £500,000, which have already been purchased, are lying idle because the new bureaucracy set up by the Government has not cleared them for use. Of course we agree that proper health and safety standards must apply, but it is madness that new trains cannot be used and that older, less safe trains remain in use. That is another example of the madness of the structures established by the Government.
On top of those facts, Railtrack's published investment plans for the next 10 years promise less investment than British Rail's previous record, yet we all know that we

must achieve higher levels of investment. Despite the Government's rhetoric in defence of privatisation on the grounds that it will produce more investment, the reality is that the opposite is the truth.

Mr. Richard Tracey: rose—

Mr. Roger Gale: rose—

Sir Teddy Taylor: rose—

Ms Short: I give way to the hon. Member for Surbiton (Mr. Tracey).

Mr. Tracey: I am grateful to the hon. Lady, although I am afraid I do not intend to be helpful to her. She talks about dogma, but I suggest that what she has been saying about investment is socialist dogma which is not backed up by reason. In my constituency, Stagecoach has just taken over South West Trains. The company is promising considerable investment in services to help commuters and business travellers and to improve the facilities at stations. That follows the total failure of BR to provide any investment in the service these past many years.

Ms Short: That was just a lot of bluster. The figures that I have quoted are the truth, even if Conservative Members do not like it. The Government always say that privatisation is about more investment, but the fact is that there is a slump in investment at the moment.

Mr. D. N. Campbell-Savours: Stagecoach's most recent foray into this area was, as my hon. Friends will recall, on the north-west coast line— from which the company subsequently withdrew when it could not make the line pay.

Ms Short: I am grateful to my hon. Friend; I intend to come to South West Trains later in my speech.

Mr. Gale: Will the hon. Lady give way?

Ms Short: No, I will not give way to the hon. Gentleman, but I do intend to give way to the hon. Member for Southend, East (Sir T. Taylor) in a few moments.
It is clear that this privatisation has been designed by zealots. The privatised service is costing the taxpayer more for a lesser service: £1 billion of taxpayers' money is being spent on the one-off costs of preparing for the privatisation and, according to the Red Book, it is costing taxpayers £850 million a year more in public subsidies to run the same services under the privatised structure.

Mr. Jacques Arnold: Will the hon. Lady give way?

Ms Short: Certainly not. One would have thought, after yesterday, that the hon. Gentleman would not dare rise from his seat.
The system that the Government have designed breaks British Rail into 100 separate profit-seeking organisations. The taxpayer is being made to pour £2 billion into the top


of this system so that it can trickle through, giving a profit to all 100 companies on its way down—profit at the expense of the taxpayer.
The public have no control over the way their money is spent.

Mr. Arnold: rose—

Ms Short: This is an outrage. I have made it clear, Madam Speaker, that I am not giving way to the hon. Gentleman. I would be grateful for your protection.
There are also many questions to be asked about the franchising system for the train operating companies. With the allegations of deliberately organised fraud on a major scale on the London, Tilbury and Southend line, we can see the consequences of scrapping a public service ethos and replacing it with a profit-maximising ethos.

Sir Teddy Taylor: The residents of Southend have suffered from a lack of investment and unreliable trains for all of the 15 years I have represented the constituency. I accept the hon. Lady's point that we must thoroughly root out dishonesty, but will she accept that it would be in the best interests of the people of Southend to sort out the matter and get privatisation going? The privatised company has signed a contract agreeing to bring in new trains in three years' time. That is more than just a pledge. We are going to have more services.
Instead of engaging in a political battle—understandably perhaps—should we ask ourselves what is best for the travelling public? The fact is that privatisation can provide the cash which British Rail, under Conservative and Labour Governments, has been unable to provide.

Ms Short: I agree with the hon. Gentleman that there is a need for better rolling stock and services on his line. I also agree absolutely that we do not need political arguments: we need a commitment to a better quality railway and to higher investment. We in the Labour party have for a long time advocated leasing rolling stock.
If the hon. Gentleman has visited rail manufacturing companies, he will know that they are interested in putting lots of private sector investment into our rail network to improve the quality of our rolling stock. That could be done under existing arrangements. Instead, because of dogma and the waste of time and money of this privatisation, all that new rolling stock has not come on stream—which is a tragedy for the hon. Gentleman's constituents and for people in other parts of the country.
I agree with the hon. Gentleman that the allegations of fraud must be dealt with thoroughly, and that his constituents deserve an end to doubt and an enhanced service; but I think that that would be better achieved in the public sector than in a profit-maximising ethos.
Inquiries into the allegations continue, and a number of questions will continue to be asked. I am told that there were plans to embark on a similar ticket-selling fraud at Barking. There is the serious question of when the fraud was planned. Did the management team allow for the proceeds of that fraud in presenting its bid for the franchise? All those questions will have to be answered.
The South West Trains bid was so low that those who work in the service expect staff terms and conditions to be decimated. We shall pay close attention to future

developments. The high-quality railways that Britain needs require good working conditions for staff so that they feel that they are stakeholders—if I may use that word—take pride in the service that they provide, and help to bring about high standards and productivity.
When the Secretary of State claimed that the new system would guarantee minimum service levels and control increases in ticket prices, he could have been said to be misleading the public. The contracts being let for franchises provide for the operator to negotiate lower conditions or higher subsidy than those laid down, and the minimum conditions laid down are in turn much lower than those relating to existing services. Moreover, only 50 per cent. of tickets are covered by promises not to allow large price increases. To suggest to the public that their services and tickets will be protected is to mislead them.
The Government's repeated claim that private operators will run services more cheaply than British Rail is also not completely true. The Secretary of State is comparing figures from bidders with inflated figures allowing for high access charges and a notional profit on top of British Rail's real operating costs. If franchising will result in such great savings, can the Secretary of State explain why taxpayers are putting an extra £850 million a year of subsidy into the system?
Why has British Rail not been allowed to bid for the franchises? The Bill that became the Railways Act 1993 was defeated in the other place—on that very point—and was then amended in the House of Commons to allow British Rail to bid; yet it has been excluded from all the bids that have been considered so far. Why? It could have provided a benchmark for decent public service standards. Any other bidder would at least have had to provide a better service than British Rail. Its exclusion breaches promises made to Parliament, and demonstrates again that the process is driven by dogma rather than by the search for a quality rail service.
The Government's proposed sale of Railtrack involves another major scandal. When their rail privatisation Bill went through the House of Commons, the Government repeatedly said that Railtrack would be a public sector company.

Mr. David Chidgey: I agree with much that the hon. Lady has said, but my party and, I think, the House would like to know the answer to a question. If she believes that Railtrack should be under public control and regulation, how is that to be achieved? It is important for us to know what will be in the prospectus for Railtrack in a few weeks' time. Will the Labour party be making a commitment to that effect?

Ms Short: I have answered the hon. Gentleman's question personally in the last couple of days, but I am coming to his point. I shall be deeply critical of his party's position, for reasons that I have already explained to him.
The proposed sale of Railtrack is another major scandal. During the passage of the Railways Bill, the Government promised the House over and over again that Railtrack would be a public sector company. Rail privatisation with Railtrack in the public sector and rail privatisation with Railtrack in the private sector are two utterly different propositions. The change of course means that the House passed legislation on one basis but is being given something entirely different. It is totally


dishonourable for the Government not to seek the permission of the House of Commons for such a major change in policy.
We know from the survey conducted by Save Our Railways that 20 per cent. of Tory Members of Parliament say in private, when asked, that they do not support rail privatisation. There must be a vote. In honour, it should be arranged by the Government. If they fail, it will be arranged by the Labour party. If Conservative Members vote for what they know is in the national interest, the sale of Railtrack will be stopped. We shall see what they are made of, or whether they say one thing to Save Our Railways, another to their constituents and another in the House of Commons.

Mr. Tim Devlin: Railtrack has said that in the first 10 years after privatisation, it intends to spend £1 billion a year on upgrading track, signalling and so on. If, after the general election, we had a Labour Government, would the hon. Lady be able to match that investment or would she leave Railtrack in the private sector?

Ms Short: Conservative Members seem to read handouts from central office rather than listen to the debate. I have already dealt with that point. [HON. MEMBERS: "Answer the question."] So few Conservative Members seem to listen. They are simply here to barrack, which the public do not like.
I have already dealt with the point that Railtrack's 10-year investment plan promises a lower level of investment than British Rail's record, and we all know that previous levels of investment were too low, so that is nothing for Conservative Members to boast about.

Mr. Jacques Arnold: The hon. Lady should check her facts.

Ms Short: I have checked my facts, unlike many Conservative Members.
Railtrack has been valued at £6.5 billion in modern replacement value for the purposes of setting the costs of access to the track. City experts believe that it will sell for about £1.5 billion. This is a valuable public asset, but it is to be sold off cheaply—£5 billion of taxpayers' investment is to be thrown away.
The scandal goes on because £1.5 billion worth of debts are to be written off in order to help the sale—another £1.5 billion of taxpayers' money thrown away. Most recently, £80 million owed by Railtrack to the train operating company for its failure to meet its contracts is to be paid not by Railtrack but, to fatten it up for the sale, by the taxpayer—another £80 million of taxpayers' money thrown away on this dogma-driven scheme.
The net result is that City experts expect Railtrack to sell for about £1.5 billion and to continue to receive £2 billion each year from the taxpayer with no public accountability. That is an outrageous proposition.

Mr. Tony Banks: What does my hon. Friend think would be the reaction if, for example, a Government decided to purchase assets worth £6.5 billion that were privately held for £1.5 billion? What

would the newspapers say about such a Government? Would not they say that that was theft, expropriation or robbery? Are not the Government proposing precisely the same thing now for publicly owned assets?

Ms Short: I agree. This is a disgraceful scandal. It is an ideologically driven project which is throwing away massive public investments and resources in return for a less good rail service. It is an outrage and every Conservative Member should be deeply ashamed.

Dr. Robert Spink: Will the hon. Lady give way?

Ms Short: No, I must get on. I am sorry.
There is a further scandal which concerns the land and property owned by Railtrack.

Dr. Spink: rose—

Ms Short: I have made it clear that I do not want to give way to the hon. Gentleman. Will he please resume his seat? I must get on. [Interruption.] I am simply referring the hon. Gentleman to the rules of the House. If I do not wish to give way, he must resume his seat. [Interruption.]

Madam Speaker: Order. The hon. Gentleman must not persist. The hon. Lady has made it clear that she is not giving way.

Ms Short: I shall press on, if I may.
There is, I am afraid, beyond the scandals that I have listed, a further scandal. It concerns the land and property owned by Railtrack. I can best summarise the situation by quoting from a couple of newspaper stories. On 14 January, in the business section of The Observer, Anthony Barnet wrote:
Property companies are queuing up for a slice of the lucrative development pie expected when Railtrack is privatised in May … On Friday"—
the Friday before Sunday 14 January—
property consultants submitted tenders for the lucrative contracts to manage Railtrack's retail portfolio … One of the property consultants who bid, but refused to be named because of the sensitivity of the deal, said: 'In retailing terms, Railtrack is one of the biggest shopping centre owners in the country. But it has been wasting its potential. It has some plans which will be controversial, but could be immensely profitable'.
And we thought that this was all about running our railways.
In The Independent on 20 January, after the regulator had decided that 25 per cent. of the proceeds of windfall profits from property would go to the train operating companies and 75 per cent. would go to Railtrack, Christian Wolmer said:
The decision to allow the company to keep the lion's share of a property portfolio that some analysts estimate could be worth £2bn"—
taxpayers' money—
follows a fierce lobbying campaign by Bob Horton, Railtrack's chairman … Sir George Young, the transport secretary, also backed the idea of putting what Railtrack's advisers call a 'property kicker'


into the sale, so that the company can be marketed as a high-yielding utility with the added spice of potential property development profits.
There we have it. That is how the Government view valuable land currently owned by the public in the centre of every town and city across the land—added spice to assist the privatisation process.

Mr. David Congdon: Will the hon. Lady give way?

Ms Short: No, I must get on.
What is to be done about this terrible scandal? I say to people such as John Humphreys, Christian Wolmar, Keith Harper—journalists whom I like and respect, who think that Labour can wave a magic wand and stop all of this— that the problem is that, as yet, we are still in opposition and do not have the votes to prevent the privatisation unless, as I have made clear, some Tory Members of Parliament have the integrity to vote with us to prevent the sale of Railtrack.
Those journalists who constantly ask what Labour will do are letting the Government off the hook and asking a question that cannot be answered by a serious political party preparing for government. The Government have not yet said whether they will sell 51 per cent. or 100 per cent. of Railtrack. We do not know the timing of the sale or the price. No serious party can say precisely what it will do in conditions of such uncertainty.
What the leader of the Liberal Democrats and his spokesperson on transport claim is simply not true. If Labour said that it will buy all the shares in Railtrack, that would not halt the sale. On the contrary, it would mean that there would be no risk in buying Railtrack's shares. They could be sold cheaply, thus wasting taxpayers' money—again—and bought back expensively, wasting further taxpayers' money. Those who think that Labour can somehow stop this flotation by such an open-ended commitment are simply wrong. It is all right for the Liberals, who are not expecting to take power, to make such promises, but it is not all right for the Labour party, which is preparing for power.
How dare the Secretary of State and Tory Members ask what Labour will do after they have done their best to damage and break up our rail network and waste vast sums of public money? Perhaps the Government are so driven by zealotry that they cannot see the reality. Perhaps a simile might help them to understand what is proposed: the Government and Tory Members are behaving like a bunch of thugs who come marauding into a town and threaten to burn down all the civic buildings before an election and then ask someone such as me, who is standing for election in the town, what I would do, if I won, with all the burnt civic buildings. My answer is that I will do all in my power to stop them burning down the civic buildings now and that, if I fail, unlike the thugs, I will do in all my power to restore and protect the civic treasures. Perhaps Tory Members will now understand what their proposals for our rail network really are.
Labour's view is that a crucial public service that receives a large annual injection of public money—that fact makes this unlike any previous privatisation—should be publicly owned and publicly accountable. That is why we vehemently oppose privatisation. We believe that we need higher, not lower, levels of rail investment. That is

why we have for a long time supported the leasing of rolling stock and public-private partnerships to mobilise higher investment levels from the private sector.
It is because we know that it is morally wrong and deeply destructive that we will try to halt the sale of Railtrack. We ask the public to help us by putting pressure on Tory Members to vote to halt the sale. If that fails, we will make our position clear before the sale so that anyone who contemplates buying shares knows Labour's view. We will set out our view when the time is right but, meanwhile, for the benefit of anyone contemplating buying Railtrack, I will list our concerns.
First, there must be public accountability and a return to the public in relation to an annual subsidy of £2 billion to a company that may sell for as little as £1.5 billion. Secondly, 100 per cent. of the proceeds from property development should go into rail investment. Thirdly, health and safety cannot be left in the hands of a company driven by commercial considerations.
Fourthly, we are concerned that track access charges are so high that they make the marginal cost of enhancing rail use prohibitive. We are attracted by the Dutch and Swedish models that direct subsidy into the infrastructure, thus creating profitable train operating companies and allowing rail to compete on an equal basis with roads. Fifthly, we are concerned that the separation of the signalling operation from train operators is inefficient and dangerous and must be reviewed. Sixthly, we are aware that a high-quality rail service requires decent employment conditions for staff. We will oppose savings driven by cuts in pay and conditions.
Labour will use its powers to legislate and to regulate, and the power of the subsidy to create a nationally integrated, high-investment, high-quality rail network that is better used by passengers and freight than the existing system. No one should doubt our seriousness, but, unlike the Government, we will not spend public money irresponsibly on dogma-driven schemes. So much needs doing in this poor old country of ours and so much spending is needed on reducing unemployment and improving the health and education services, housing and much else, that every penny must be spent wisely.
I advise anyone who is thinking of investing in Railtrack not to do so because the structures being created by the Government cannot be left in place. With the help of the electorate, Labour will form a better Government and create a better rail system. That is our promise.

The Secretary of State for Transport (Sir George Young): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
congratulates the Government on the progress that it is making with privatisation, particularly with the start of private passenger services on the South West and Great Western lines, offering the prospects of better services and higher investment at less cost to the taxpayer; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as an opportunity for the railways to access private finance for investment.".
I welcome this opportunity to set out our plans for a better railway, to report on the progress that we have made towards achieving that and to contrast it with the policy vacuum offered by the hon. Member for Birmingham, Ladywood (Ms Short). Anyone listening to


her speech and hoping for some glimmer of intelligence on how the Labour party conference resolution on a publicly owned railway would be achieved would have been disappointed. It was an excuse of a speech, offering no clarity from a party that hopes to be elected. It is, I think, the first time in my life that I have been called a right-wing ideologue, a zealot and a thug. I hardly recognise her description.

Mr. Brian Wilson: Will the right hon. Gentleman give way?

Sir George Young: No. I should like to exit the terminus and gather up a bit of speed before the first signal turns red.
Our White Paper, published in July 1992, set out a clear coherent programme for revitalising the railways by transferring them to the private sector. The policy has been pursued steadily over the past few years and is now coming to fruition, much to the frustration of the Labour party, which has been running to catch up. The speech by the hon. Member for Ladywood was evidence that Labour has now run out of steam.
I shall set out the progress that we have made towards achieving that better railway, but first let me deal with what the hon. Lady said about the LTS franchise, comment about which forms the main component of the motion before the House.
I reported to the House on Monday that, pending investigation of ticket irregularities, the franchising director had decided not to proceed with the transfer of the LTS franchise to Enterprise Rail. Since then, British Rail has sent audit teams to all the stations where the allocation of revenue between London Underground Ltd. and the train operating company could be manipulated to the advantage of the train operating company.
The checks picked up only one irregularity, involving about 30 tickets and a sum of £250, at Walthamstow Central, where the chief clerk has been suspended from duty. Checks of the newly franchised companies have revealed no irregularities at their stations.
The House should be in no doubt that we take the allegations seriously. As I said on Monday, financial irregularities, in the public or the private sector, have no place in a modern railway. The incidents are being fully investigated by British Rail and the Rail Regulator, and the franchising director has assured me that until he, the Rail Regulator and British Rail are completely satisfied that the allegations have been fully investigated, there can be no question of the transfer of the LTS franchise going ahead. The franchising director will not take any decision about the future of that franchise until he has had the chance to consider the outcome of the investigations.
The hon. Member for Ladywood alleged—

Ms Glenda Jackson: Will the Secretary of State give way?

Sir George Young: I shall finish the next paragraph in my speech and then give way.
The hon. Member for Ladywood alleged that the irregularities would not have been uncovered had the LTS franchise already been transferred to the private sector.

There is no basis for that assertion. The irregularities were picked up as a result of new audit arrangements put in place for privatisation through the Association of Train Operating Companies.
After privatisation, ATOC will continue to carry out regular audits of ticketing transactions involving British Rail and the franchise operators. The audit arrangements have worked well and quickly; the irregularities were picked up within weeks. Nevertheless, the Rail Regulator will examine the robustness of the audit and check systems to find out whether any changes are required to improve the detection of fraud and other irregularities.

Ms Jackson: I am grateful to the Secretary of State—[Interruption.]—and to quell any anxiety on the Conservative Benches, I of course declare an interest, as I am sponsored by the train drivers' union, ASLEF. It is my understanding that the franchise for LTS was awarded on 19 and 20 December. How could that happen if the franchising director had gone through the five stages necessary before a franchise is offered? Had he made the relevant inquiries into the managerial and economic competence of the franchisee, and had he really exercised his powers of diligent examination of the background of the would-be franchisees?

Sir George Young: Yes, clearly he had, because the franchise was awarded to LTS. The crucial factor is that the audit picked up the irregularities almost at once. I hope that the hon. Lady will await the outcome of the investigations undertaken by ATOC, the Rail Regulator and the Office of Passenger Rail Franchising before coming to any premature conclusions.

Mr. Wilson: rose—

Sir George Young: I shall give way once more, and then I shall make progress.

Mr. Wilson: For the benefit of the House and of potential investors in any of the companies, will the right hon. Gentleman confirm that if the incident had occurred after privatisation, it would have been exactly the kind of offence and breach of contractual conditions that would have justified the removal of the franchise there and then?

Sir George Young: It is, indeed, true that the regulator and OPRAF have a wide range of powers at their disposal, including, in the case of the former, the power to revoke the licence. The point that I want to make at this stage, however, is that the prompt response to the incident by ATOC, British Rail and the Rail Regulator sound a clear warning to everyone in the industry that sharp practices will not be tolerated, but will be uncovered and dealt with.
I hope that the House will join me in expressing the hope that other public bodies, especially local authorities confronted by worse problems than those that I have mentioned, would respond as promptly.

Mr. Peter Luff: Does my right hon. Friend agree that what he has just said shows which party is tough on fraud and tough on the causes of fraud?

Sir George Young: I am grateful to my hon. Friend. Indeed, earlier today I read the Appleby report into Lambeth council, which said:
In 1993, it seemed there could have been as many as 400 to 500 council officers receiving fraudulent benefits. I could see no justification for Lambeth's failure to take strong action in this matter.

Dr. Spink: Does my right hon. Friend agree that it ill behoves the House to prejudice and prejudge matters that


are under investigation and that we should not address the detail of matters until inquiries have been completed and we have the facts before us? Is he aware that column 20 of Hansard of 5 February 1996 shows most clearly that the hon. Member for Birmingham, Ladywood (Ms Short) said that the management team was "corrupt" and added the qualification "if only after I had shouted "Withdraw"?

Ms Short: On a point of order, Mr. Deputy Speaker. The hon. Member for Castle Point (Dr. Spink) raised that matter on a point of order yesterday, and it was dealt with fully by Madam Speaker. The hon. Member for Gravesham (Mr. Arnold) misquoted Hansard. It is out of order to raise the point again in such a misleading way. [Interruption.]

Mr.Deputy Speaker (Sir Geoffrey Lofthouse): Order. Hon. Members must settle down and get on with the debate.

Sir George Young: rose—

Sir Teddy Taylor: Will my right hon. Friend give way?

Sir George Young: I will give way in a moment after I have got slightly further down the track.
Of course I regret that, as a result of what I have just referred to, users of the London-Tilbury-Southend line, including the constituents of my hon. Friend the Member for Southend, East (Sir T. Taylor), will have to wait a little longer before enjoying the benefits of privatisation, which are already starting to emerge for passengers on the Great Western and South West Trains' lines, as my hon. Friend the Member for Surbiton (Mr. Tracey) mentioned a moment ago.
We have combined robust safeguards to protect the benefits that passengers want from the railway with opportunities for franchisees to introduce better services and deals for their passengers. It has always been my view—I suspect that it has been shared by most hon. Members—that people will judge policies not on rhetoric but on performance: on what happens on the railways under the new regime.
I should like to outline some of the safeguards. For the first time, key fares are to be pegged to inflation for three years and at 1 per cent. below inflation for four years thereafter. In simple terms, I can guarantee that for every journey to every station in the country, there will be at least one regulated fare—a safeguard that passengers have never had before, laying the foundation for a revival in rail travel. Secondly, for the first time, service levels are guaranteed by contractually binding passenger service requirements—a guarantee not provided by British Rail. National through-ticketing schemes and discounts for disabled, elderly and young people are all protected.
In addition, franchisees are offering additional services above the PSRs, such as improved passenger charters— South West Trains is setting punctuality and reliability targets 2 per cent. higher than at present—improved information for passengers and bus feeder services for local stations. South West Trains introduced such services to Winchester and Liphook the day after it took over the franchise.
Moreover, the franchisees are demonstrating their enthusiasm for marketing their services through plans for improved facilities for business travellers, special offers for SWT's frequent travellers and £1 travel days for senior citizens.

Mr. Tony Banks: rose—

Sir George Young: As I know that the hon. Gentleman wants to welcome that, I shall give way.

Mr. Banks: Which other country in Europe is pursuing such a model of rail privatisation? If it is so wonderful, why is everyone not leaping in to embrace it?

Sir George Young: Five or six European countries have done the same as us and have separated the provision of infrastructure from the provision of services—a policy recommended in one of the European Commission's directives.

Mr. Banks: Which countries?

Sir George Young: It is important to separate the provision of infrastructure from the provision of services.

Mr. Banks: Answer the question.

Sir George Young: That is the answer that I give to the hon. Gentleman—[Interruption.]

Mr. Deputy Speaker: Order. There is no point in asking the Minister a question if he is not allowed to answer it.

Sir George Young: I am grateful for your protection from one of the more boisterous Chelsea fans, Mr. Deputy Speaker.

Sir Teddy Taylor: I am grateful for the strong and determined action that the Secretary of State has taken on LTS. He knows that the long-suffering passengers of Southend have had many problems for many years. Will the matter be resolved soon? Will it be a matter of days, weeks or months?

Sir George Young: I said on Monday that the inquiry will not be rushed, as it is important that it is full and complete. We must, however, complete it as soon as is reasonably practicable, and I will ensure that my hon. Friend is kept in the picture.
I say to my hon. Friends whose constituency lines have not yet been franchised and who, no doubt, want to get the benefits that are emerging that the Government want to see those benefits extended promptly to other parts of the country.
The hon. Member for Ladywood referred to investment. I have been particularly impressed by the willingness of the franchisees to invest in the future of the railways. Great Western Trains plans to refurbish and modernise its rolling stock ahead of current plans to enable it to provide additional and flexible services, while South West Trains is embarking on a £3 million programme of improvements to stations and passenger facilities such as security, lighting, waiting rooms and information services. That is


clear evidence of a long-term commitment to the railway by those who won the franchises, and that sense of commitment will drive forward the improvements in the railway that all hon. Members want to see.
A few months ago, the hon. Lady was trying to pretend that privatisation would not happen. Her plan was to stop privatisation, but it has failed. The first franchisees are operating, and nine franchises have either been awarded or are on the market. These alone comprise more than 50 per cent. of the existing railway by revenue.

Mrs. Alice Mahon: Will the Secretary of State give way?

Sir George Young: I shall make some progress, if the hon. Lady will allow me.
Pre-qualification has started for a further two franchises—South West and Wales, and the Cardiff Railway. The franchising director is making excellent progress. There is great market interest and serious bidders are coming forward with serious bids. Rolling stock companies, heavy maintenance depots, seven design offices, British Rail Telecommunications, on-board catering and a range of smaller businesses have all passed into the private sector. We have invited bids for 13 British Rail infrastructure support businesses, and I look forward to announcing the first sales very soon.
In all, more than 30 businesses have been sold or franchised, bringing proceeds of more than £2 billion. More than half the former British Rail by turnover has either been sold or is on the market. I am pleased that there is no evidence that bidders have been deterred by the attitude and the empty threats of the Labour party.

Mrs. Mahon: Will the Minister confirm that in 1993 the House was promised that British Rail would be allowed to bid for franchises? Why has British Rail been excluded? Is it not an example of the Government saying one thing and doing another?

Sir George Young: That is not the position. The matter is clearly set out in the legislation. The duties of the franchising director, Roger Salmon, are clearly set out, and there are certain conditions under which he can allow British Rail to bid. Those conditions have not so far been met. As the franchising director has been satisfied by the level of interest shown by the market as a whole, it has not been necessary to allow British Rail to bid. He is keeping the position under review.

Mr. Tam Dalyell: Will the Secretary of State give way?

Sir George Young: I will, out of respect for the hon. Gentleman.

Mr. Dalyell: On infrastructure—this is not a frivolous question—it may be within the recollection of those at the Department that, because of bad fencing, some cattle strayed on to the Edinburgh to Glasgow line near Polmont, causing a very bad accident in which fatalities occurred. One gathers that the responsibility for fencing and protection against cattle and other animals straying on

to the line is far from clear. Before the Secretary of State leaves the subject of infrastructure—I do not expect an answer from off the top of his head—will he undertake that the Department will at least look at the matter because, as far as the Edinburgh to Glasgow line is concerned, it is serious?

Sir George Young: Of course no one wants cattle on the Edinburgh to Glasgow line. Normally, it would be Railtrack's responsibility permanently to safeguard the infrastructure. I will make some inquiries and write to the hon. Gentleman.
We have announced that Railtrack will be floated on the stock exchange in May. I firmly believe that its privatisation offers the best future for Railtrack, for passengers and for freight.

Mr. Campbell-Savours: Will the Secretary of State give way?

Sir George Young: No. I want to make some progress.
Privatisation will allow greater use of private sector skills in managing the network and will provide greater scope for private capital to be invested in improving the network. Railtrack recently published the first long-term plan for managing the rail network, detailing its intention to spend more than £1 billion a year over the next decade. That is a substantial sum and good news for all rail users.

Mr. Campbell-Savours: Will the Secretary of State give way on that point?

Sir George Young: No. I want to make some progress and deal with the hon. Member for Lady wood's argument that we have no mandate for the sale of Railtrack.
On the contrary, the sale of Railtrack was clearly foreseen when the White Paper was published three and a half years ago. We said then:
In the longer term the Government would like to see the private sector owning as much as possible of the railway. Powers will therefore be taken to allow the future privatisation of all BR track and operations.
All the necessary powers were taken in the Railways Act 1993 and the Government made it clear at the time that the powers would be used in due course to privatise Railtrack. For example, my right hon. Friend the Member for Kettering (Mr. Freeman) said:
ultimately we wish to see Railtrack move into the private sector".— [Official Report, 1 November 1993; Vol. 231, c. 43.]
My noble Friend the Earl of Caithness said:
Railtrack's existence as a Government-owned company will last only until it is feasible to transfer it to the private sector".—[Official Report, House of Lords, 15 July 1993; Vol. 548, c. 354.]

Ms Short: I have here sheaves of quotations in which Ministers say the opposite. In Committee, the junior Minister, in exasperation, said:
We have been round the issue several times. Railtrack will be in the public sector for the foreseeable future".—[Official Report, Standing Committee B, 23 February 1993; c. 400.]

Sir George Young: I have made it clear that the Government also explained that Railtrack would move


into the private sector. I have given three quotations in which it was made clear that that was our ambition. That is the goal that we want to secure.
The hon. Member for Ladywood claimed that privatisation was a bad deal for the taxpayer. The early signs are that privatisation will be better value for money. Let me quote the figures. British Rail was budgeted to receive £83.4 million in 1995–96 to operate South West Trains' services. Stagecoach will receive, on average over the seven years of the franchise, £49 million per annum— an average saving of £34.4 million per annum. British Rail was budgeted to receive £61.7 million in 1995–96 for running Great Western Trains' services. Great Western Holdings will receive an average of £44.8 million—an average saving of £17 million per annum. Those are substantial figures on two franchises which, if replicated across the network, will significantly reduce the grant required by the railway. On top of those savings come the proceeds from the sales of other BR businesses, which already amount to more than £2 billion before Railtrack is sold.
The picture that I have painted of our policies and plans for the railway represents a promising vision for the future.

Mr. Campbell-Savours: Will the Secretary of State give way?

Sir George Young: I want to make some progress. It is a short debate and it is clear that many other hon. Members want to speak.
Our vision is increasingly being shared by others—by bidders for franchises and for other parts of the railway, by commentators and, I hope, by passengers, especially those whose services are now being provided by private operators.
What about the Labour party? It has said that it will not buy back the rolling stock that we sold before Christmas. It has said that it will not break the franchise contracts, which run from seven to 10 years. As we have just heard, there is no commitment to buy back Railtrack. When the hon. Member for Ladywood and I first debated the railways together in October she asked whether someone as intelligent as me could possibly support the Government's policy. It now looks as though someone as intelligent as herself is doing exactly that. We are left with the conclusion that Labour is in favour of privatisation, but it cannot say so for fear of its trade union paymasters.

Mr. Campbell-Savours: Will the Secretary of State give way?

Sir George Young: No. The end of the track is in sight.
As the flotation of Railtrack is drawing ever closer, the Labour party is sitting on its hands, refusing to say whether it is sticking to its commitment to buy back the railways. However, the hon. Lady made her views on buying shares in Railtrack very clear on Sunday. Speaking without restraint, she said that it would be immoral for people to buy shares in Railtrack. What does her comment about immorality mean for the millions of people who are shareholders in other companies that used to be nationalised industries—for the stakeholders in British Telecom, British Airways or the BAA? Is she accusing them of immorality for buying a stake in a former nationalised industry?
What do her remarks tell us about the RMT, which has a large shareholding in Thames Water? What about the Labour Members who are sponsored by RMT and other unions, such as the GMB, which have shares in privatised companies? Is she claiming that they are all living off immoral earnings?

Mr. Campbell-Savours: Will the right hon. Gentleman give way?

Sir George Young: No.
There are many questions to be asked of the Opposition. I will ask just a few. Given their commitments to public ownership, how would they pay to buy back the railways? Would it be through higher fares, higher taxes or higher borrowing? Can they match our guarantee on fares? If they cannot, passengers will know that their fares will not be safe under Labour. Could they match our guarantees on services? Can they give a commitment, as we have done, that the Rail Regulator will continue to reduce access charges by 2 per cent. per annum in real terms?
At 7 o'clock, the House must decide which strategy for the railways is the right one: Labour's muddled policy, which is uncosted and unconvincing; or our strategy, which is clear, confident, forward-looking and determined to roll back decades of decline under the dead hand of state ownership and usher in a new era for the railways. I have no doubt how the House will decide.

Ms Glenda Jackson: In the vote at 7 o'clock, the House should consider carefully the national opinion poll that was conducted on this single issue last year which showed that 69 per cent. of people are totally opposed to rail privatisation. An even more interesting statistic is that one in five Conservative voters—of those who were open and honest about the fact that that is how they voted in the general election in 1992—will reconsider casting their votes for the Conservative party on that issue alone. Conservative Members with comparatively small majorities should consider seriously the deep opposition, which has always existed and continues, to this benighted policy.
The late, much lamented Robert Adley called the Government's proposals the poll tax on wheels. We can compare the cost to the taxpayer of this privatisation with the cost of that other benighted legislation. It has been estimated that the poll tax cost taxpayers more than £4 billion. My hon. Friend the Member for Birmingham, Ladywood (Ms Short) succinctly described the costs to the British taxpayer of the Government's policy, which attempts not to give the travelling public a better service but to destroy an integrated rail network system. Of the £1 billion that has been already spent, not one penny piece has gone into improving the track, buying new rolling stock, manning stations or improving signalling equipment.
After the first full year of franchising, the taxpayer will have had to fork out an additional £1.8 billion, the equivalent of lp off the basic rate of tax. If we divide that by the number of taxpayers, that is an additional £72 per taxpayer. Regionally—I must admit a preferential interest as I represent a seat in the south-east of England—every taxpayer in the south-east will have to pay an additional £93.
My hon. Friend the Member for Ladywood spoke of the amount that Railtrack would be worth if we had to replace it today, which is £6.5 billion. The Government have said that they will sell it for £1.5 billion. That is another £5 billion; we are now up to £7.8 billion.

Sir George Young: Will the hon. Lady give way?

Ms Jackson: If I may first finish my mathematics. That means that rail privatisation has already exceeded the cost to the taxpayer of the poll tax.

Sir George Young: The hon. Lady has stated a figure of £1.5 billion and said that the Government had volunteered that figure. What is her reference?

Ms Jackson: Could the Secretary of State repeat his question; I did not hear it.

Sir George Young: The hon. Lady attributed a figure in relation to proceeds from the privatisation of Railtrack to Ministers. I should be interested to know the reference.

Ms Jackson: I apologise to the Secretary of State; it was a slip of the tongue. The figure came from City experts. However, as we know, City experts and Ministers work so closely together on so many occasions that it is sometimes difficult to separate them and decide who has made a decision.

Mr. Tony Banks: City experts are more honest than Ministers.

Ms Jackson: Certainly.

Dr. Spink: Will the hon. Lady give way?

Ms Jackson: Let me finish my point.
If one examines how much we, as taxpayers, have paid to the City experts whom the Department of Transport has employed over the years to help it bring about privatisation—which, as Labour Members know, means the destruction of our railway system—it is, according to the Government's figures, more than £12 million. I think therefore that I could be allowed a little leeway in sometimes confusing the grey suits.

Dr. Spink: I have been listening carefully to the hon. Lady. She seemed to say that my constituents are against privatisation. Is she aware that my constituents are served by the LTS line, which, along with British Rail, has failed my constituents during the past 15 years, as we heard from my hon. Friend the Member for Southend, East (Sir T. Taylor) earlier? Does she accept that my constituents wanted some change to take place, and that doing nothing was simply not an answer for them? Will she tell me what she suggests should be done instead of privatisation? Where would she find the investment to pay for the necessary changes?

Mr. Deputy Speaker: Order. My comment does not relate directly only to the hon. Gentleman, but long interventions do not help in short debates.

Ms Jackson: I have every sympathy for the constituents of the hon. Member for Castle Point

(Dr. Spink)—I know that they have been forced to travel on the "misery" line. However, I should point out to him that it is his party and his Government who have failed, during the past 16 years, to find the necessary investment to improve that line. Far from doing nothing— [Interruption.] Allow me to answer the hon. Gentleman's intervention.
Far from doing nothing, the hon. Gentleman's Government have wilfully wasted his constituents' taxes, not only by not investing in the line, not finding new rolling stock and not improving signalling, but by attempting to destroy the line. If the hon. Gentleman had listened to what my hon. Friend the Member for Ladywood had said, he would know what we would do to provide a railway system for this country that is fit not only for the people who travel on it now but for the 21st century.
The Secretary of State referred to Great Western Trains, which was one of the first two franchises, and spoke of the improved rolling stock that it is committed to introducing on its line. The two franchises that have managed to deliver a service have received quite a lot of coverage, and it seemed that one of the ways in which Great Western improved its rolling stock was to paint a new colour down the side of a comparatively old train. As we know, the first services that South West Trains and Great Western Trains provided were not by trains but buses.
I draw the Secretary of State's attention to a written answer from his Department which states that, out of the franchised companies, Great Western Trains has the most speed restrictions imposed on it because of a failure to invest in maintaining the track on which it is attempting to run its services. Sixteen speed restrictions are being imposed on lengths of track that vary from 200 yd to two to three miles. The Secretary of State may speak about the franchise operators' additional investment and improvement of services to the travelling public. If that investment is a pot of paint—as opposed to the necessary millions of pounds to maintain track so that trains may run at speed and passengers arrive at their destination at times that they find acceptable—the right hon. Gentleman is being extremely ingenuous.
I find it very surprising that the Government are holding the commitments made in the contracts between the franchising director and the franchisees so close to their chest, but I understand that, as no additional money has been put into our railway system by the franchise operators, it would be possible for a franchisee to meet the franchising director at the end of the first year of attempting to run services and say, "I am sorry, but I cannot run services for the amount of subsidy that you give me. Would it be possible for me to examine fare structures not once a year, as is the case at the moment, but three times a year?"
That shows that when the Government claim, as they have done, that they have given guarantees to the travelling public about services and about the freezing of fares, they say one thing and do unto others something quite other.
The Government's protestations that fares would be frozen gave the travelling public and all the people of the country to believe that that meant that all fares would be frozen. Closer examination shows that fewer than half of fares—47 per cent.—will be frozen, and I understand that,


on InterCity, only 21 per cent will be. We were also told that fares would not increase by more than the rate of inflation. The Government did not choose to freeze fares at the inflation rate of January 1996—the month when fares always increase—but of June 1995, when inflation was infinitely greater than it was in January. There, yet again, the travelling public and the people of the country have been deceived about what the Government intend when they speak about presenting progressively wider and better services for the people of Britain.

The Minister for Railways and Roads (Mr. John Watts): Does her brief from ASLEF tell the hon. Lady how long it takes for all the fare manuals to be revised? Will she suggest how fast they might have been revised, and consequently her opinion on the latest month for which an automatic retail prices index figure could be used to base the fares limitation from January?

Ms Jackson: Regrettably, I am not briefed by ASLEF so I cannot answer the Minister's question, but I can tell him that the fares that I mentioned in the main came from his Department. If he wishes me to obtain a brief for him from ASLEF, I will be happy to advise because, if we need expertise in running railways, I have a strong suspicion that there is greater work experience among the members of ASLEF than there is among the Ministers facing me.
I realise that many hon. Members wish to speak and I notice that I have spoken for a comparatively long time. I end where I began, by urging Conservative Members to take the opportunity—positively rare in their parliamentary lives—to place the interests of their constituents first. The Government's plans for privatisations will lead only to progressively greater hardship for the people of the country, who desperately wish to use their trains for environmental reasons alone. People are desperate to be able to get out of private transport because of the damage that they know that it does to themselves, their children and their communities. They would dearly love to be able to make additional journeys on a properly integrated public transport system.
I urge Conservative Members to acknowledge that a properly integrated public transport system can never be visited on the country while a Conservative Government are in office, and that the present Government's plans to privatise the railways are a disaster. They should exercise their responsibilities to their constituents and vote with Labour Members in the Lobby tonight.

Mr. Bob Dunn: I am grateful for the opportunity to follow the hon. Member for Hampstead and Highgate (Ms Jackson). When she speaks on transport matters, she is always careful to acknowledge that she is sponsored by ASLEF, and she did so earlier. It might be to the benefit of the House if I read out from the entry in the Register of Members' Interests the extent of that sponsorship. On page 72 of the current Register, the hon. Member for Hampstead and Highgate says that she is
Sponsored as a parliamentary candidate by ASLEF, who pay 80 per cent. of general election expenses and in the year 1994–95 gave £5,500 to Hampstead and Highgate Labour Party for its constituency work.
It is obvious from the speeches by Labour Members that there is two-tier opposition. I challenge the hon. Lady to consider the following: is she speaking in the debate

today for the people whom she represents, or is she taking one step to the left and speaking for the union that sponsors her? In order to make the position absolutely clear, I challenge her to resign her sponsorship from ASLEF so that when she speaks in the House and in the community she can say—without fear of contradiction from someone such as me—that she speaks out of philosophical conviction, not because she is sponsored by a trade union.

Ms Glenda Jackson: rose—

Mr. Dunn: I have not yet finished my attack. The hon. Lady is an interesting character in many ways and I have enjoyed her past experiences enormously. However, as one of the more extreme left-wing Members in this place, she must make her position clear. I shall give way on that point.

Ms Jackson: I point out to the House and to the nation at large that the hon. Gentleman has never been part of my past experiences, and he certainly will not be part of my future experiences. My constituents have a particular interest in the future of our railways. Three of the main railway termini—King's Cross, Euston and St. Pancras— are situated just to the south of my constituency and the lines that those termini serve run at the bottom of my constituents' gardens. Therefore, the future of the railways is of particular interest to them.

Mr. Dunn: When I said that I enjoyed the hon. Lady's past experiences, I meant that I watched her films when I was very young. The Labour party has a major problem.

Ms Jackson: rose—

Mr. Dunn: It was not a silent film in which I first saw her.

Ms Jackson: If the hon. Gentleman was very young, he would not have seen any of my films because they were not allowed to be shown to people under the age of 16.

Mr. Deputy Speaker: Order. That is very interesting, but we should get down to a serious debate on the motion before the House.

Mr. Dunn: It is not true that the first films that I saw were silent. More than 200 Labour Members of Parliament are sponsored by trade unions. That is the way in which the Labour party has evolved and I have no quarrel with that. However, when I speak on behalf of my constituents, I speak for them—I am not sponsored, controlled or got at, and unions are not represented on my association executive council as is the case with Labour Members.

Mr. Wilson: Will the hon. Gentleman give way?

Mr. Dunn: No, I will not give way again; I resent being interrupted when I make a point that Labour Members do not like. Two hundred Labour Members of Parliament are sponsored by trade unions, and we know the result of that. The hon. Lady did not answer my


question as to whether she will resign her sponsorship. I dare say that she will write to me with an answer when she has one.
We listened with great interest to the speech by the hon. Member for Birmingham, Ladywood (Ms Short). I am not certain—and my constituents need to know—whether a Labour Government would renationalise the railway system. If the Labour party were to renationalise the railway system, what levels of compensation would be paid to shareholders of Railtrack? How would passenger services be brought back under state control, bearing in mind the legal obligations that have been entered into recently and those that will be entered into in the future?
How would the Labour party fulfil its commitment to encourage more passengers and freight on to the railways? Finally, would the hon. Member for Ladywood—who is not in the Chamber—commit her party to greater investment in the railways? If so, to what extent?
It is quite clear that the Government have a good record of support for our national rail system. Since nationalisation, £54 billion has been invested in the railways. Every Conservative Government since the war have increased investment in the railways. Since 1979, this Conservative Government have demonstrated their overwhelming commitment to the railways by investing more than £15 billion in British Rail, including £6.5 billion in the past five years.
Since 1979, £4 billion has been invested in new rolling stock. There has been massive investment in the Dartford loop line in recent years, leading to modern new rolling stock for the people of Dartford. The number of complaints that I receive about the quality of service on the Dartford loop line has fallen to almost none.
I expected to hear something about where Labour stands on rail privatisation. The truth is that Labour opposes rail privatisation, just as it opposed that of British Telecom; the water, gas and electricity boards; British Airways and so on. Nationalisation has been a disaster since it first came into being in the late 1940s under the Attlee Government. What is Labour's policy now? I hope that the hon. Member for Cunninghame, North (Mr. Wilson) will make it clear—in the way that the hon. Member for Ladywood did not—that Labour will renationalise the rail system. He owes that declaration to the intellectual honesty that I have always associated with the Labour party in the past.

Mr. Tony Banks: Come on.

Mr. Dunn: There is no intellectual honesty to be found in the Labour party, according to the hon. Member for Newham, North-West (Mr. Banks)—the former chairman of the Greater London council. We know where that hon. Gentleman is coming from. What is more, we know where he is going—back to that side of the House.
Labour must decide for the sake of its own soul whether it speaks for the people or for the trade unions that sponsor Labour and control its local parties. I know the answer, and so do my right hon. and hon. Friends. I look forward to rail privatisation. It will mean accountability, efficiency, investment and a far better service. Then we might see an improvement in the number of rail passengers. I have no doubt how I will vote tonight. I shall vote in the Lobby with the Government.

Mr. David Chidgey: I probably have full agreement that the motion and the debate so far emphasise how far removed the rail privatisation process has become from serving the national and public interest—hon. Members have no doubt enjoyed themselves immensely over the past hour or so. I will make a few points briefly, because I know that other hon. Members wish to contribute.
I remind the House of the recent scandal of the misuse of ticket revenue on the LTS line, the disposal of rail assets at a fraction of their value, creating large profits for the purchasers at the taxpayer's expense, and the lack of regulation to ensure investment to modernise our rail system and achieve growth in passenger and freight loadings, which should be the key objectives of the rail system. The argument surrounding the fraudulent misuse of LTS ticket income is another illustration of the flaws in the privatisation process.
An integrated public transport system has been a vital component in the success of our capital city in every respect—commerce, tourism and culture. The interchangeability of public transport was a key factor in that success, made possible by the successful travelcard scheme. Under the umbrella of public ownership, there was no problem or concern about operators diverting income to maximise their profits. The formula for distributing travelcard income was based on passenger surveys. It was a tried and trusted system. The events of recent weeks on the LTS line have destroyed the trust of operators in what until now has been a well-proven system. Rail, underground and bus operators have been unnerved by those events. Without an effective ticket interchangeability system, there could be chaos at ticket offices at all purchase points. There could be bitter in-fighting between operators to attract passengers. London's integrated public transport system, in which we should be able to continue to take great pride, is threatened with collapse.
I was saddened to hear in the House today arguments about whether the LTS irregularities were discovered by auditors at some stage. The key issue is that trust in a system that has been working extremely well has been undermined.

Sir Donald Thompson (Calderdale): The hon. Gentleman must have travelled by air from airports such as Heathrow, and swapped tickets and destinations between British Midland, British Airways, Air France and other airlines with no trouble. That is private enterprise at its best. The same facilities will continue on the railways, and must continue.

Mr. Chidgey: I am a veteran air traveller, but the hon. Gentleman should remember that the frequency of air travel is nothing compared with that of public transport in a city such as London. If one were to introduce the same systems in the capital, there would be chaos.

Mr. Wilson: I am sorry to interrupt the hon. Gentleman, but the hon. Member for Calderdale (Sir D. Thompson) scored such a good own goal that I cannot miss the opportunity to point out that different airlines might be involved in a multi-part journey, each part of which is separately priced at the full rate. One can get discounted through air tickets, which one certainly cannot get on the railways now.

Mr. Chidgey: That is a good example of why we should call into question the Government's obsessive criticism of the so-called inefficiency and non-competitiveness of the public sector—which, from what we heard today, has a hollow ring.

Mr. Tony Banks: The hon. Member for Eastleigh (Mr. Chidgey) said that he regularly travels by air. Has he ever been on a flight that departed or arrived at its destination at the scheduled time? If British Rail or any rail service was so inefficient in its punctuality, there would be riots. Hon. Members know that that is true.

Mr. Chidgey: My experience of air travel is wide and varied. In some cases, it has been more a question of which day the aircraft would arrive. I hope that we never find ourselves in that situation with rail.
We should be striving for an effectively regulated, well-funded and well-managed public and private partnership, capable of delivering an efficient and responsive rail service. A case in point is the rail company that reported its
best-ever overall performance levels and ended the year with not a single route triggering season ticket discounts … The 92 per cent. target set by the government for punctuality of services overall was met … These improvements in operations were matched by a continuing rise in customer satisfaction, measured by independent research.
The rail company's overall service levels were raised by the introduction of new trains, which
were ordered following a successful bid for £150 million leasing finance".
Another £84 million was invested in resignalling and overall efficiency gains exceeded 10 per cent. The company
increased its operating profit … from £5 million to £71 million
in one year.

Mr. Dunn: Where is it?

Mr. Chidgey: Indeed, where is it? That company's operating profit reached £71 million and it received no grant, and it reinvested £432 million. That company was not an Asian tiger but British Rail's Network SouthEast in 1993–94—its last year of operation. That report shows the benefits that can be achieved by managers given the freedom to use their talents, as they did under the organising-for-quality system. I hope that the Minister, in his response tonight, will give us some comfort.

Dr. Spink: Will the hon. Gentleman give way?

Mr. Chidgey: I am sorry, but I must make progress.
I hope that the Minister will allow British Rail managers the opportunity to bid for some of those franchises. The managers have shown what they can do and they should have that opportunity.
I now come to the subject of the privatisation of Railtrack. We must have a nationally planned, nationally controlled, integrated rail network. That is essential to the community and to our economy. The Government, as we have heard today, now plan to sell off assets worth at least £6 billion, with an 8 per cent. rate of return, for a fraction

of their value. To make the deal even more juicy, the Government are currently allowing Railtrack to accumulate the revenue from track access charges.
What is happening to the money collected from track access charges? At present, I understand that the money is being held under the heading "Asset Maintenance Plan". In the six months to March 1995, the total amassed in track access charges was some £483 million, and £253 million in the six months to September 1995. That revenue was retained on the balance sheet. It gives the appearance of very healthy revenue, but it also disguises the impoverished state of Railtrack's assets. Why is Railtrack refusing to spend that money, when the organisation knows that it needs to be spent urgently on the maintenance and renewal of the rail network? Why are the Government allowing Railtrack to charge for track access when it continues to allow the rail network to fall into disrepair? Is that yet another example of creative accounting on the real costs of privatisation to the taxpayer?
Last year, we saw the Government's willingness to sell off the rolling stock companies for a minimum return. It is astounding that such an important component of the rail service could be sold for such a knock-down price. Rolling stock valued at some £3 billion was sold for about £1.8 billion. It is scandalous that the new companies are under no obligation to purchase new rolling stock. They have merely to maintain existing stock, while they are guaranteed an annual rate of return of approximately £700 million a year. That is not bad on a £1.8 billion investment. Predatory companies have been given an opportunity to run down the rolling stock, maximise their profits and, at the end of the contracts, hand back a derelict railway.
Government subsidies are clearly being used to induce private sector companies to take the opportunity to operate rail companies under franchise. Stagecoach, as we have heard, will receive a subsidy of some £53 million a year to operate South West Trains. I have been told that when British Rail last ran that sector of the rail network, it made a profit of £15 million and required no passenger service obligation subsidy. Why does Stagecoach need a subsidy? Because it must pay the hugely inflated rail access charges.

Mr. Watts: British Rail last ran those services for the year up to Saturday night, and it received a subsidy of £83 million a year.

Mr. Chidgey: I am referring to the time before the South West Trains region was set up. In any case, the subsidy was being paid so that British Rail could pay the track access charges.
In spite of improvements and investment by British Rail, South West Trains has done nothing to improve the railway. Too many elderly coaches trundle up and down the region. They are fitted with the notorious slam doors, which have an appalling passenger safety record. That point strikes home for me because, for several years, a door-lock system has been available which was developed in the railway works in my constituency. The system has been tested and found to work, but South West Trains has placed no orders and Stagecoach has given no commitment to make those trains safer.
If the confusion and disarray that have been caused to rail operations was not enough, the chaos that has been caused by through ticketing is inexcusable. Hon. Members


will be aware of the report by the Consumers Association that discovered that 90 per cent. of ticket inquiries resulted in incorrect information about the cheapest tickets available, despite the regulator's insistence that information on the cheapest fares for a journey should be available from all ticket offices. The train operating companies, on average, over-priced tickets by £24, which is scandalous. In many cases, the charges quoted were double the cheapest fare.
We have heard today some glowing accounts of the first week of operation of the new franchises for Great Western Trains and South West Trains. Let us return to reality. Passengers who used to travel into London on one line and wished to travel home on another could do so on one return ticket. Now, if the lines are run by separate companies, passengers can travel to Paddington on one line, but they cannot use a return ticket to travel out of Waterloo later on the same day. They have to buy separate tickets. That is not only ridiculous, but bizarre.
I had a call to my office late yesterday afternoon from a young lady called Sally Lloyd-Jacob, who has allowed me to use her name today. She travels every day from Sutton to Horsham on a line now run by South Central Trains. She catches the 8.25 from Sutton, which arrives in Horsham at 9.10. That is a 45-minute journey, but yesterday it took five hours. Why? The brakes had caught fire. That tells us much about the level of maintenance we may now expect. However, the five-hour delay was not due to lack of repairs or maintenance. There was another train immediately behind to which the passengers could easily have transferred. However, the train behind was not owned by South Central Trains; it was owned by South West Trains. The five-hour delay was caused while the two companies haggled over the price that would be paid for the transfer of passengers from one train to the other. Passengers, possibly including the elderly and children, were left freezing while rival companies argued over profit. That is a measure of the new train service that the Government have given us.
We need a commitment to return to the sensible operation and development of our railways in the national interest. The Liberal Democrats are pledged to reacquire a controlling interest in Railtrack, to create a national rail system that is responsive to national, integrated transport planning, with a private and public partnership. I must tell Opposition Members, who often sing from the same song sheet as I do, that it is not acceptable to hide behind the internal rules of share transfer in the stock exchange. Those rules apply to companies trading with each other, not to Governments. There should be a commitment in the Railtrack prospectus to exchange 51 per cent. of Railtrack shares for Government bonds, at the issue or market price—whichever is the lower—using primary legislation if necessary. Labour's position is untenable. Leading City analysts claim that the Railtrack sell-off would collapse tomorrow if Labour made a commitment to reacquire 51 per cent.
The Liberal Democrats have pledged to establish a national rail authority to regulate properly, with a partnership between the public and private sectors. We would renegotiate the franchises to recognise the long-term investment needs of railways, and the operators of the new companies would welcome that. They know how ridiculous the franchises are. We would set targets

for increased passenger and freight loadings, instead of maximising profits at the taxpayer's expense, which is what the Government have done. We shall vote in favour of the motion tonight, because we believe that the Government's wholesale destruction of our integrated national rail system must be opposed and must be reversed.
The Labour party has been found wanting. It must now show some resolve, commitment and leadership, if it is to be taken seriously on rail privatisation in the House and in the country.

Mr. Graham Riddick: I congratulate the hon. Member for Newham, North-West (Mr. Banks) on his apparent promotion to the Front Bench. That has happened so often before and he has returned to the Back Benches. Let us hope that this time his promotion is permanent, but only to the Opposition Front Bench.
I am sorry that the hon. Member for Eastleigh (Mr. Chidgey) did not welcome rail privatisation. I must congratulate the councillors on Liberal Democrat-controlled Isle of Wight council. They have welcomed the fact that their rail service is to be one of the first put out to franchise—but as we know, Liberal Democrats say different things to different audiences.

Mr. Chidgey: I hope that I have made it clear—I may have been speaking rather fast to save time—that we are not against privatisation: we are against the way in which it is being handled by the Government, which is appalling. We want a partnership between the private and public sectors to run the railways of this country.

Mr. Riddick: This has been an extremely useful exchange. The Liberal Democrats have now said on the record that they are in favour of privatisation. That is to be welcomed. I am not quite sure, however, how Liberal Democrat researchers will be able to respond to the apparently contradictory approaches to privatisation in their party.

Mr. Peter Ainsworth: I rather doubt whether my hon. Friend will be able to shed any light on this—I am certainly confused. A few moments ago the hon. Member for Eastleigh (Mr. Chidgey) seemed to be urging the hon. Member for Newham, North-West (Mr. Banks), who is temporarily occupying the Labour Front Bench, to renationalise Railtrack. There seems to be total confusion; there has certainly been a volte-face in the space of three minutes.

Mr. Riddick: My hon. Friend makes a telling point. I do not know whether the hon. Member for Eastleigh would like to reply to it—

Mr. Chidgey: I am delighted to do so. I do not want to turn this debate into a seminar on our policies, but I should be delighted to send hon. Members copies of our transport policy, in which all will be revealed. We have made it clear that Railtrack should stay in public control, through a 51 per cent. shareholding. We have also made it perfectly clear that we encourage the acquisition of


private finance in the running of our railways. We simply want it done more effectively than the Government have managed.

Mr. Riddick: I thank the hon. Gentleman very much for his contributions; they will be most helpful to both main parties.
I want to talk first about the general principle of privatising the railways, and secondly about one narrow aspect of the railways—that is, charter train operation.
At this stage of a privatisation it is always more difficult to set out the benefits that will accrue, because those benefits have not yet become apparent—there has not been enough time for them to show up. It is easy for the Opposition to criticise and to forecast the demise of the industry, just as they have done with every other privatisation. They have said that prices will rise and services will decline. It was outrageous of the hon. Member for Birmingham, Ladywood (Ms Short) to say that a private company cannot be trusted to ensure high safety standards.

Dr. Spink: What about British Airways?

Mr. Riddick: That indeed is the obvious riposte. Many of the world's major airlines are privately owned companies with excellent safety records. It is a disgrace that the hon. Member for Ladywood should be putting around those scare stories when they are clearly not accurate.
We need only look at other privatisations to find out what really happens. The Labour party is increasingly desperate and occasionally disingenuous when it makes its attacks on privatisation. There was a classic example of that over the new year. During the cold spell, hundreds of water mains cracked in various parts of the country. Up in the north-east, about 150,000 homes were cut off for a short time as a result of those problems. A local Labour Member of Parliament, I think the hon. Member for Sunderland, South (Mr. Mullin), went on television to say that it was all the fault of privatisation. Yet at the same time 100,000 homes in Northern Ireland were cut off for the same reason, and as far as I know the water industry there is not privatised.
Up in Strathclyde, where the water industry is still in public hands, 500,000 homes were cut off. That shows how Labour sometimes resorts to desperate claims.

Mr. Dalyell: Five hundred thousand homes cannot possibly have been cut off in Strathclyde—this is drivel.

Mr. Riddick: I got the figure from The Daily Telegraph, which is certainly more accurate than most in its reporting. I can show the hon. Gentleman the cutting if he wants to see it.
If the Labour party really believes that privatisation will be so disastrous, why do not Opposition Members commit themselves to renationalising Railtrack? Why not commit themselves to reversing the process? Of course, the reason is that they know that privatisation has transformed the economy for the better. Long-distance coaches, British Airways, the British Airports Authority, road haulage and British Gas—those have all been transformed; prices have come down and customer services have improved.

Commercial disciplines and incentives have forced the managements of those companies to provide customers with what they actually want.
When British Airways was being privatised back in 1979, the hon. Member for Glasgow, Garscadden (Mr. Dewar), leading for the Opposition, said that the company would become the "pantomime horse of capitalism". As we know, British Airways is now one of the most successful airlines in the world.
I believe that privatisation will have the same beneficial effect on the railways as it has had on many other industries. The new rail franchises will give new entrepreneurs and new companies the opportunity to come into the rail market. Besides bringing innovative ideas with them, those companies will want to introduce new and different services and to try new pricing arrangements that will benefit the travelling public. It is in their interests to attract more passengers to the railways—that is the point.
The purpose of privatisation, in short, is to halt and reverse the decline in railway use. Since 1948, £54 billion of taxpayers' money has been invested in the railways, but the railways' share of journeys has fallen from 17 per cent. in 1953 to just 5 per cent. now. It is time that we tried to reverse the process.
My local electricity company is an example of what can be achieved under privatisation. Prices have fallen by 19 per cent. since the company was privatised. They were reduced by 3.5 per cent. last April and will be reduced again by a similar amount this coming April. The customers of Yorkshire Electricity have also benefited from a £50 bonus resulting from the flotation of the National Grid. That, too, benefited customers.
British Telecom is another example of privatisation benefiting customers. Inland call charges have been cut by 21.4 per cent. since 1984—a 53 per cent. reduction in real terms in telephone call prices since the company was privatised. That is of major benefit to everyone. There has been an explosion in the number of public pay phones. At the time of privatisation there were 77,000; there are now 130,000. When British Telecom was privatised, the right hon. Member for Salford, East (Mr. Orme) said:
The public telephone box could be threatened with extinction".—[Official Report, 18 July 1983; Vol. 46, c. 41.]

Mr. Deputy Speaker: Order. It would be helpful if the hon. Gentleman now returned to the subject of the privatisation of the railways.

Mr. Riddick: I think that the point I was making is extremely relevant—

Mr. Deputy Speaker: Order. The Chair has decided that it is not.

Mr. Riddick: I contend, Mr. Deputy Speaker, that it is—but I entirely accept your ruling. I believe that the benefits of privatisation will feed through to rail customers, as they have fed through to electricity and gas consumers.
Exactly a year ago, I made a speech on a similar motion. I congratulate the Labour party on its precision— although I do not suppose that it was deliberate— in choosing to debate this subject on the anniversary of the debate on rail privatisation that took place on


7 February last year. At that time, I explained that a company called Days Out Ltd. had been formed and was planning to run 60 steam excursions during the year, some of them on completely new lines. I regarded that as a plus for the new railways.
Railtrack has been very co-operative with charter operators, trying to encourage as many of them as possible to use the tracks. Unfortunately, a number of excursions were cancelled last year as a result of the hot, dry summer: it was feared that fires would break out beside the lines because the ground was so dry. The main problem for charter companies, however, has been the behaviour of Rail Express Systems, which until recently was a wholly owned subsidiary of the old British Rail. It is a great shame that that company has abused its monopoly to make life difficult for charter operators.
RES was recently sold to Wisconsin Railways, but before that it was obstructing charter operators, overcharging and then refusing to provide the details of its invoices. The Huddersfield Green party, which has run a number of charter trains over the years, experienced problems last year because of mismanagement of the trains by RES. I believe that those abuses have taken place as a result of the company's monopoly on licensed steam excursions.
Wisconsin Railways has reacted quite favourably to charter operators. It has been in charge only since December, but I understand that it is negotiating with the charter operators and trying to repair the damage done by RES. There is more to be done, however, and I believe that the Rail Regulator will have a role to play. I have tabled an early-day motion on the subject. Most important of all, we need to ensure that there is more competition in the organisation of charter trains. Perhaps my hon. Friend the Minister will consider that.
I shall be delighted to support the Government in the Lobby. I believe that rail privatisation will bring benefits to passengers. Our only reason for introducing it is our wish to see lower fares and better services. We want rail passengers to gain, and I believe that they will.

Dr. John Marek: The speech of the hon. Member for Colne Valley (Mr. Riddick) consisted of two parts: an apology for privatisation, and special pleading for charter trains. His discourse on privatisation was composed of some pretty selective statements. For example, he said that the price of electricity had fallen by 19 per cent. since privatisation—in real terms, presumably; but it probably rose by the same amount just before privatisation. He forgot to mention that British Airways' debts were written off. He also tried to make us believe that the privatisation of British Gas had been a success, notwithstanding all the fuss about Mr. Cedric Brown.
Opposition Members are not convinced that the hon. Gentleman is right. I admit that British Telecom has done well, but that might also have something to do with technology. The hon. Gentleman did not mention that. We would have listened to him more attentively if he had tried to be a little more serious, rather than peddle the usual political points. People are not stupid; they realise that there is more to success, or the lack of it, than privatisation.
British Rail is in an entirely different position from other privatised companies, because it does not have a monopoly. There are other means of travel, such as cars, aeroplanes and coaches. More important, it has no obvious means of making a profit. In this country and elsewhere in Europe, because of the way in which cars and petrol are taxed, subsidies must generally be paid for the running of a public transport system. That, too, places British Rail in a completely new category. I do not accept the argument that, because previous privatisations have succeeded—some have; others have not—this privatisation will succeed as well.
The motion mentions the allegation that tickets were taken from a machine at Fenchurch Street station and sold at Upminster, and the Secretary of State referred to another ticket fraud at Walthamstow. I do not believe that such fraud would take place if we had an integrated railways network. It is true that London Underground is run slightly differently from British Rail, but if there were a single system there would be no reason for one part of it to try to cheat the other.
Much more will now have to be spent on auditing. It is not just a question of catching a clerk who has succumbed to temptation. That is bound to happen sometimes—none of us is perfect, and an audit system is always necessary— but audit provision will now have to be increased simply because, owing to commercial considerations, one half of the organisation will be encouraged to engage in sharp practice at the expense of the other half. On occasion, commercial enterprise will become corruption and fraud.
If it is proved that tickets were purchased at Fenchurch Street and sold at Upminster, that will be fraud in anyone's book. I shall not prejudge the issue or blame anyone at this stage, but it is clear that something underhand has gone on. I shall await the findings of the inquiry. I noted on Monday, when the Secretary of State replied to a private notice question, that he is to return to the House to explain the reasons for what happened and to tell us what he proposes to do.
The speech of the hon. Member for Colne Valley revealed that privatisation has much to do with dogma and ideology. My hon. Friend the Member for Birmingham, Ladywood (Ms Short) used almost the same words, and I am happy to echo them. No real concern is felt for the industry, the travelling public or the country; the Tory party simply wants to divest government of as many functions as possible. That is the real motive for inflicting rail privatisation on the public.

Mr. Devlin: I beg to disagree. Will the hon. Gentleman consider this point—not a dogmatic point, but a practical point relating to the way in which our public services are funded?
At the end of her speech, the hon. Member for Birmingham, Ladywood (Ms Short) described all the great things that a future Labour Government would do to improve health, social services, hospitals and a variety of other things. The hon. Gentleman must accept that—in the words of the hon. Member for Ladywood—that will necessitate a good many hard decisions. There is no doubt that the railways will be at the back of the queue, because they are not as politically emotive as hospitals. Consequently, when the public pie has to be divided, the railways will get the scraps. The benefit of privatisation is not that it is a dogma, but that it enables the infrastructure to receive resources from elsewhere—

Mr. Deputy Speaker: Order. I did not call the hon. Gentleman to make a speech. Many hon. Members still wish to speak in this short debate and long interventions do not help.

Dr. Marek: I appreciate the point made by the hon. Member for Stockton, South (Mr. Devlin), but privatisation will increase, not decrease, the subsidy. The additional net subsidy has been calculated to be £850 million a year. There has been some argument about the subsidy for South West Trains. The franchisees will be able to cut the subsidy if they succeed in getting more people to travel and in getting extra revenue, but they can also do it by cutting staffing.
Many stations in the United Kingdom could have no staff at night. That is important, because many women simply will not go on to a station at night which may be all but deserted if it is not staffed and there is no security. The private franchise operators may employ staff if they can obtain extra revenue, but I suspect that the number of staff employed late at night, when few people travel, will be cut and that there will be fewer, not more, services as a result of privatisation.

Mr. Donald Anderson: Is not another reason why the franchise process is bad for the public that the current timetable is politically rather than economically driven, with the result that the sums that are likely to be obtained will be reduced accordingly because the potential purchasers know that the Government are desperately trying to get this operation finished by the next election?

Dr. Marek: My hon. Friend is right. Railtrack was initially valued at about £6.5 billion, but now the Government are talking of getting about £1.5 billion or £2 billion for the sale of that massive estate that is owned by the public. The hon. Member for Colne Valley talked about the £50 reduction in people's electricity bills. We all got £50 off, but we sold the grid, and for ever more, succeeding generations will pay shareholders' profits for that once and for all cut.

Mr. Tony Banks: It is rather like a burglar coming back and offering someone five quid.

Dr. Marek: My hon. Friend is right.
Conservative Members are fond of asking whether the next Labour Government will be able to provide the investment that has hitherto taken place in British Rail. I think that we will. Investment between 1974 and 1979 under the previous Labour Government at constant 1995 prices was just under £1 billion. It was less under the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), when it was perhaps £700 million. Unfortunately, between 1980 and 1984, investment went down, and reached the £600 million mark one year. It is true that, between 1989 and 1993, the figure has been more than £1 billion, but in 1993–94 it went down to £663 million—a catastrophic decline for which the Conservative party is entirely responsible.
Average investment has been about £1 billion. That £1 billion should not all come from the public sector. I agree with the hon. Member for Eastleigh (Mr. Chidgey) that there must be a partnership between the private and

public sectors. Preferably, the public sector borrowing requirement rules should be redrawn, especially where there is a clear case of a resulting return on capital investment. If such a return was reasonably certain, whether it was public or private would not matter. I am keen that that should happen.
Like my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) I have an interest to declare. I am not sponsored by ASLEF, but I am sponsored by the National Union of Rail, Maritime and Transport Workers—roughly, according to what the hon. Member for Dartford (Mr. Dunn) said, under the same conditions. I certainly speak for the union members because they want a decent railway system, high motivation and to serve the public. I also speak for my constituency, for my constituents in Wrexham and, in this case, for nearly everyone in the United Kingdom.

Dr. Spink: Is the hon. Gentleman aware that the last time the Labour party applied those novel management methods to the PSBR, inflation reached 27 per cent., Britain was bankrupt and my constituents were impoverished?

Dr. Marek: I would not use the word asinine, but I hope that the hon. Gentleman will think about what he has said a little more carefully. One can borrow for items on which there is no return and no hope of any return, and for others on which there is a good return—almost a guaranteed return—over the life of the investment, which may be anything from 20 to 40 years. We must be a little more intelligent about this and stop only those investments for which there is no guaranteed return.
I do not believe that, under privatisation, there is any real prospect of a lot of rolling stock. There is certainly no prospect of an early upgrade of the west coast main line. I do not think that trains will run from Euston to Manchester in less than two hours. The regulator will not help. He is not there just for the travelling public; he is also there to enable the franchisees to make profits. Nor will there be cuts in subsidies.
What can be done? The only answer is that Railtrack must be in public ownership. The system can be regulated more toughly, but it cannot be integrated without a publicly owned Railtrack in the major part of the network. That is the crucial part. We can do what we like by way of regulation, but franchisees will still compete against each other and revenue will have to be raised by obtaining more passengers or by being commercially enterprising.
I agree with my hon. Friend the Member for Ladywood that it is premature to say exactly what we will do. We should wait for the prospectus to be issued for the flotation of Railtrack. I agree with what is probably most City opinion, and certainly that of the hon. Member for Eastleigh. I am sure that the Labour party will say that it will take Railtrack back into public ownership, whether by taking the voting shares from the company, by demanding equity for subsidy, or simply by taking back the shares— the Government cannot spend the money that quickly if Railtrack is sold in the autumn—but without paying for any of the dealing costs or other associated expenses associated with the share distribution.
If we do that, I am confident that we shall ensure that Railtrack is not sold and that the flotation will not take place. That is a prerequisite. After that, Britain must


demand a proper, integrated, functioning railway. The debate about the car is now taking place and changes are being made. The Government realise that we cannot build more and more roads because they simply suck in more and more traffic. We need a debate about how we transport our people and goods up and down the land. An integrated publicly owned and publicly accountable railway will be part of the future and part of that debate.

Mr. Peter Ainsworth: I am grateful for the opportunity to make a few comments in this interesting debate. I welcome the privatisation of rail services for the reasons on which my hon. Friend the Member for Colne Valley (Mr. Riddick) touched. Like all other privatisations, rail privatisation will improve the service that the public receive, improve the management of the business, lower the cost to the public of using the service and enhance investment in it.
The Opposition say that the Conservative party is driven by dogma in wishing to privatise and franchise rail services, but that is far from the truth. We are driven by a desire for rising investment, better services and more use of the railways. I represent a constituency that is riven by two motorways. I know as well as anyone the damage that cars do to the environment and the pollution that they cause, so the matter is of great concern to my constituents. I deplore the fact that, under nationalisation—despite the £54 billion that has been poured into the industry since 1948—there has been such a dramatic decline in rail use by passengers and for freight.
Nationalisation of the railways has not worked; it has been an unmitigated disaster. It is not dogma that drives Conservatives to want to see the liberalising effects of privatisation, but an urgent desire to see an improvement in the service. If we are looking for dogma, we should look to the Labour party, as its only solution to the problems of the rail network is to renationalise it.
It is one thing to have principles and to believe in state control—I understand that some Labour Members are still prepared openly to admit to that—but it is quite another to offer as the only response to the declining use of rail the very formula that has proved such a disastrous failure in the past.
My constituents want investment. They want the investment that privatisation can harness. They want the £1 billion a year that Railtrack has said that it will invest in renewal and maintenance work in the 10 years following privatisation. Instead of endlessly escalating prices, they want fares pegged to the rate of inflation for the next three years, and to below inflation for the four years after that. They want independent regulation of service standards. They want the statutory protection that privatisation will introduce for the very first time.
The fact that British Rail was accountable to nobody for the service that it provided probably accounts for the fact that, in many cases, that service was famously deplorable. Under nationalisation, British Rail became a national joke, an emblem of British decline—the British disease. People were fed up with being left standing on cold, dark platforms with no information, not knowing when the next train was coming, and not knowing when they would get home or get to work. It was a peculiar hell

invented by British Rail. It even reached the stage where Saatchi and Saatchi, I think, launched a campaign, for which the slogan was, "Sorry seems to be the hardest word". It certainly was for British Rail because, instead of sorry, all too often we got a shrug as the member of staff shuffled off to get another cup of tea.
My constituents want an end to the restrictive practices that have flourished under the vast, monolithic structure that was BR. As with so many other nationalised industries, the overriding feeling of the people who used the service was that it was run for the benefit of the employees, not the users. Under privatisation, all that will change. To be successful, the new franchisees will have to make themselves attractive. That means investing more in equipment and people. In the private sector, the old BR shrug simply will not do.
It is extremely sad that, whereas in 1953 24 per cent. of all goods were carried by rail, only 5 per cent. are today. We all want more goods to be carried by rail. The Railways Act 1993 will help substantially and the greater flexibility that is being introduced should encourage more freight on to rail. In that context, I commend the work of the piggyback consortium—

Mr. Wilson: On a point of order, Mr. Deputy Speaker. I have noticed in the Register of Members' Interests that the hon. Member for East Surrey (Mr. Ainsworth) is a consultant to S. G. Warburg Group plc, which is advising Railtrack on the flotation. Do you think that the hon. Gentleman should have declared an interest?

Mr. Deputy Speaker: That is purely and simply a matter for the hon. Gentleman concerned. Hon. Members know the rules of the House, including the new rules.

Mr. Ainsworth: I have had no discussions of any kind with S. G. Warburg on the subject of Railtrack. Had I done so, I would of course had made that clear earlier in my remarks.
I return to the subject of the piggyback consortium, which includes 40 freight operators, port and terminal operators and local authorities, who have got together to develop a scheme that will increase dramatically the capacity of the rail network to carry fright at relatively little extra cost. I commend the work that it is doing and I wish it well.
That is more than I can say for the proposal by Central Railways, which involves the construction of 180 miles of new railway between Leicestershire and Calais. There is growing evidence to show that that proposal is technically flawed and economically dubious. In the meantime, it is causing severe blight to my constituents and those of other hon. Members the length of the line. The best thing that I can say about it is that I hope that it reaches an early resolution. I hope that my hon. Friend the Minister is listening carefully to these remarks.
In the meantime, I support the Government's proposals. I shall vote with them tonight. I sincerely hope that privatisation of the railways will lead to improved services—I believe that it will—better standards and a better rail system for Britain.

Mr. Tony Banks: The hon. Member for East Surrey (Mr. Ainsworth) should have declared the fact that he was a parliamentary affairs


consultant to S. G. Warburg, which was employed to give advice on merchant banking; we would have been interested to know about that. A range of hon. Members are listed as working as parliamentary consultants to the merchant bank advisers to the privatisation proposals. It is no wonder that they are so in favour of privatisation—they have done very well out of it already. The hon. Gentleman gave a grotesque view of British Rail's past, showing that he knows little of its history. I do not know what the quality of his advice to Warburg was, but I certainly would not want to pay for it in used railway tickets.
I do not want to be controversial, but rail privatisation is total lunacy. It makes no sense whatever, however it is examined. It is not based on any rational transport or economic arguments, and none of the arguments for it has persuaded the public that it makes any sense. If there is any sanity left on the Conservative Benches, the Government would abandon this proposal, because clearly it is not doing them any electoral favours. No other country in Europe—despite the Secretary of State's comments on the split between the railways and the operators in other countries—is splitting its railway system into all these organisations. No one would follow that crazy example. If any countries were so doing, the Minister would have been able to answer my question.
The procedure is pretty straightforward. The Government scrap British Rail's debt—a debt that is owed to the people of this country because the money was borrowed. We deserve to see it coming back to us, as we would expect if we had lent money to any other concern. Having scrapped the debt, they sell the assets at knock-down prices. Even the lunatics on the Conservative Benches could sell the assets, because they have discounted them heavily. We know that Railtrack was originally valued at about £6.5 billion. The Government are prepared to accept about £1.5 billion. I would like to know what the real figure is. Perhaps the Minister will tell us how much they are prepared to accept for Railtrack. It will not be anything like the £6.5 billion valuation.
Private operators receive subsidy to the tune of an extra £700 million—from taxpayers again. What sort of privatisation is it when the Government sell off an industry cheap and still expect those who have had their assets taken away to continue to subsidise the private operator?

Mr. Nigel Evans: Would the hon. Gentleman care to remind the House which union he is sponsored by, and does it invest any of its pension fund money in privatised companies?

Mr. Banks: I am sponsored by the Transport and General Workers Union and I have not faintest idea where it puts its income. If the hon. Gentleman wants to find out, he can read its annual report in the Library. Will he then tell me how we can ever find out who puts money into the Tory party, which will not publish its accounts and show which crooks and fascists from abroad invest in it? The hon. Gentleman should not lecture us about honesty and openness in accountancy, either in the unions or the political party. Thank you, Mr. Deputy Speaker; I feel much better for that.
This is a lunatic proposal. The Government propose to split a unified railway system into dozens of competing units. As I said, no other European country is doing so.

I challenge the Minister to tell us which other European country is doing that—I want him to name them specifically.

Mr. Watts: I am happy to do so: Sweden, Germany and Holland, to name but three, are splitting their infrastructure from the operation of services. They have divided services between inter-city, freight and regional railways and they intend to privatise them. No doubt, as they develop the details of their policy, they will want to follow the successful model that we are implementing in this country.

Mr. Banks: That is fanciful nonsense. If that is the Minister's answer to my direct question about which country is breaking up its railways into different, competing parts, as we are doing, he has not answered the question.

Ms Short: It is misleading for the Minister to quote Sweden and Holland in particular, which we have examined as attractive models that seek to reduce track access costs so that road and rail can compete equally and which have two public sector companies. To suggest that that is anything like the Government's proposals is an outrage.

Mr. Banks: My hon. Friend again makes the point that the Government have been revealed as being prepared to deceive themselves and the country about this privatisation. The railway system will be disorganised and unco-ordinated if it is ever split up.
I get angry when I hear the argument about the lack of investment in British Rail. Yes, there has been a lack of investment. The hon. Member for Southend, East (Sir T. Taylor) complained about the line in his constituency and the lack of investment in the past 15 years. Has it ever occurred to him that, in that time, his party has been in government? Why does he not blame his party for failing to invest in his British Rail line, as he has a right to do?
The Government say that the private sector will invest resources. Where is the logic in that? If private investors can profitably invest in the railways, why cannot the state equally do so? The only reason why it has not done so is that the Government would not permit it. The Government deprive undertakings and nationalised industries of investment possibilities, services become less efficient and the Government then say, "Oh, we must privatise industries because they are inefficient and they have failed to invest properly." The Government are responsible, however, for the failure to invest in British Rail and in all the other sectors that we have discussed. We know that the Government can always borrow money far more cheaply than any private company car. If they had had the will to invest, investment could have been made.
The Government have failed to invest in the railways and public transport generally. I could go on for a long time, but I will not—my few minutes are almost up. I should like to take Ministers around London, not in the armour-plated, plush limousines in which they get chauffeured around London but on the underground, on British Rail—what is left of it—in the south-east or on the clapped-out buses that belch out fumes and poison Londoners 24 hours a day. They might then not be so complacent about travel, railways or privatisation.
I am not a Front Bencher. I had a moment of glory a few minutes ago when I was left in charge at the Dispatch Box, when I thought that I discharged my duties very responsibly, but I do not have to be cautious and responsible in what I say. I say to my hon. Friends that, if I were in charge of my party, I would tell potential asset strippers of the railways that the buyer should beware and that legalised robbery by the Government of taxpayers' assets would be countered by a Labour Government taking back into public ownership all the assets at a discounted purchase price—assets that have been stripped out of industries that the Government gave to companies at a knockdown price. I would do so—this is a Liberal party suggestion as well, although my proposal is more radical—through interest-bearing bonds that would be redeemed in the future.
Who would be upset by the policy? It would not be the people whom I represent in the east end or, I suspect, the majority of people in this country. It would, however, certainly put off the asset strippers, the fat cats and the City slickers who just stand around waiting to cream off industries at the public's expense.
This is a lunatic set of proposals coming from a Government who have clearly lost all control of time, opportunity, policy and their senses.

Mr. Peter Luff: I do not know about you, Mr. Deputy Speaker, but for me this debate has a strange sense of déjà vu, both in terms of the Opposition's arguments and of the debate on classification between my hon. Friend the Member for Dartford (Mr. Dunn) and the hon. Member for Hampstead and Highgate (Ms Jackson). There may be a case for another ten-minute Bill to classify the Opposition horror stories that we have been hearing, especially from the hon. Member for Newham, North-West (Mr. Banks). They would be classified as fiction by any librarian, that is for sure.
Nostalgia, we often hear, ain't what it used to be, but we will be able to look back on today with great nostalgia. This is the last opportunity for Labour to peddle its horror stories with even a semblance of credibility outside this place, because when we next return to the subject the franchise operators will be providing services. Two are already up and running and we do not know what they will do yet, but we will have evidence gained over a sustained period of the improved service quality that they will deliver.

Mr. Wilson: On a point of order, Mr. Deputy Speaker. This relates to my previous point of order. Would it be in order for the hon. Gentleman to declare the rail privatisation interest of Lowe Bell Communications?

Mr. Deputy Speaker: Again, hon. Members know full well the rules of the House. It is matter for them what they declare, or otherwise.

Mr. Luff: I am not even aware of the rail privatisation interest to which the hon. Gentleman refers. I advise the Chamber of Shipping through Lowe Bell Communications and no one else.
The current edition of The Economist states:

privatisation … is more likely to be a consumer's dream— the start of a new era which will revolutionise Britain's under-invested railway network. Those who jeered that rail privatisation would never get rolling have already had to eat their words.
Even discounting the better management that privatisation should bring, assured levels of subsidy and a stable fare-structure can hardly fail to deliver improved performance.
I say, "Amen to that."
I am already beginning to receive evidence in my constituency of improved service by Great Western Trains. I was delighted to receive a letter on 3 January from its managing director, Brian Scott, who said:
I am confident you will see a nice balance between continuity and innovation.
That is precisely the point of privatisation. He goes on:
As far as the Worcester area is concerned we aim to heighten our profile, including the use of local advertising. In order to spearhead this, I am appointing a Cotswolds Business Manager with special responsibility for Worcester, Hereford and the Cotswold Lines."—[Interruption.]
Is that not interesting? Labour Front Benchers laugh at attempts to increase rail travel. I thought that that was what they wanted. It is certainly what I want. Their laughter speaks volumes for what they are really up to in this debate.
This morning I received another fax from Mr. Scott. I had asked him about the early experience of rail privatisation. [Interruption.] Labour Members can barrack all they want. They do not like the truth—I know that it hurts them. The truth is that privatisation is already bringing benefits. Mr. Scott says of Great Western Trains:
It… faced severe weather problems on its second full weekday of operation. With large sections of motorway and airports in the region closed, Great Western Trains was able to run 99 per cent. of its trains (one Hereford to Paddington cancellation only). Only 5 out of the 133 trains run were over half an hour late despite horrendous weather conditions.
There was excellent co-operation between Railtrack and Great Western Trains who were also able to assist other (BR owned) Train Operating Companies in difficulties by making four additional station calls.
That demolishes the myth that there would be a lack of co-operation between railway companies. We saw co-operation in action yesterday, and it delivered people to their destinations, against the odds.
That myth is but one of a number that I want to demolish. The second myth is the idea of massive fraud. Of course, no part of any nationalised industry has ever suffered any fraud or inefficiency whatever; no constituency Labour party has ever been implicated in any fraud whatever—for the benefit of readers of Hansard, I am saying that ironically. In fact, taxpayers have been ripped off by nationalisation.
The third myth is that privatisation will mean a worse service. I heard your ruling earlier, Mr. Deputy Speaker, about not being able to draw too many parallels with other privatisations, but I had personal experience of British Telecom this weekend when my telephone went wrong, and there has been a revolution in the service quality that it delivers. That will happen on the railways, too.
In my constituency even the preparation for privatisation has led to timetables that, for the first time in living memory, give bus connections, to improved timetable displays at stations, to better on-board services on trains and—I say this with no sense of apology—


to guaranteed services between Worcester and London, for the first time ever. The passenger service requirements, much derided by Opposition spokesmen, provide my constituents with a guarantee of express trains to London. Privatisation means better services, not worse.
The fourth myth is rather an odd one. It is that trade unions do not like privatisation. On the contrary, it seems that they do. We have heard a lot of evidence about their investments in privatised utilities, and the investors include even the National Union of Rail, Maritime and Transport Workers. Will the unions extend that love of the privatised utilities and buy shares in Railtrack? I hope that they will. Then we shall safely be able to say that it will be a case of "do as we do", as well as "do as we say".
The fifth myth, and probably the one that it is most important to demolish, is the Opposition's fanciful claim that nationalised industries are more responsive than the private sector. Of course they are not. I looked back at a debate that took place in the House on 15 December 1952. The Committee stage of the Transport Bill was being taken on the Floor of the House when the then Member for Wolverhampton, South-West, Mr. J. Enoch Powell, quoted from a Fabian Society pamphlet about the railways published two years earlier, in 1950. It said:
The paramount fact of centralisation
of the railways
is the remoteness of those responsible for taking important decisions from those whom they affect … The term 'management' indicates, not an organisation of human beings, but an amorphous mass of anonymous individuals with 'no soul to save and no backside to kick'.
Later Mr. Powell said:
British Railways at present are an organisation employing over 600,000 men and the responsibility for decisions in the whole of the system is substantially centralised. No commercial undertaking of so embracing a character as British Railways would endeavour to conduct that undertaking in the top-heavy fashion of British Railways as organised at present".
That top-heavy organisation endured for 40 years, and only now are we beginning to see the end of that ridiculous situation.
Perhaps most tellingly of all, Mr. Powell quoted a letter from an engine driver living in Wolverhampton, which still rings true 44 years later:
Railway employees prior to 1948"—
[Interruption.] The hon. Member for Cunninghame, North (Mr. Wilson) would do well to listen to this, because it might remove the smile from his face, for once. The letter said:
Railway employees prior to 1948 were, unfortunately, for the most part adamantly Socialistic. They have now received an effective dose of Socialism in practice, and verily, it has proved a penetrating lesson. They see with scorn an ever-growing superfluity of officials and inspectors, a daily deterioration in efficiency and a relentless intensification of muddle.
That is exactly what nationalisation led to—not to responsiveness but to a lack of responsiveness, and to remoteness.
According to Mr. Powell, the Fabian Society pamphlet concluded that
some form of de-centralisation of management into smaller regions, each under a manager having overall responsibility for all departments, is preferable to the present centralised administration."—[Official Report, 15 December 1952; Vol. 509, c. 1071–76.]

The Fabian Society got it nearly right 40 years ago: Opposition Front Benchers would do well to listen.
The official history of the Great Western Railway makes exactly the same point when it says:
For the railwaymen at large on the Western, nationalisation meant a remote British Transport Commission, headed by people of whom they had never heard, a Railway Executive manned by people only one of whom they knew, and a Western management who obviously would go on playing the traditional tunes.
There was no increased responsiveness there.
The sixth and final myth is the argument that investment will be jeopardised by privatisation, but is guaranteed by nationalisation. The history of the railways shows that one of the real problems with nationalisation was that it destroyed investment. After nationalisation, southern region could not pursue its electrification programme, as it should have been allowed to do.
The official business history of British Railways, written by Dr. T. R. Gourvish with the sanction of the British Railways Board, said the following about the first 25 years of nationalisation:
The early years of nationalisation were a bleak period in terms of investment, and many writers have traced some of the railways' enduring problems to this situation.
It then mentions one or two academic experts, one of whom,
Ken Gwilliam, also a transport economist, emphasised the difficulties caused by the accumulated disinvestment of the war and early post-war years, the result, he thought, of both the inadequacy of the war-time financial arrangements and the attitude of the post-war Labour Government. 'Facing inflationary pressure … [the government had] deemed that investment in railways was an expendable item in the short run.'
That is the dilemma that will always face Governments of any political colour, who must choose between hospitals, schools and railways. It is one of the principal reasons for putting the railways into the private sector. In terms of investment Labour failed the railways in the early crucial days of the nationalised industry. Nationalisation failed the railways.
Labour asks us to believe that everything is different now, and that now it would do as it says, not as it did then. That is not a very plausible argument. I have one simple question to ask the hon. Member for Birmingham, Ladywood (Ms Short). Would Labour invest more in the railways? Yes or no.

Ms Short: Yes.

Mr. Luff: Ah, a pledge. Labour would invest more in the railways. How pleased I am to hear something concrete at last.

Ms Short: Read my speech.

Mr. Luff: How much more? That is the next obvious question to ask.

Mr. Tony Banks: Do not exchange comments with a trainspotter.

Mr. Luff: We hear no more about the amount. Perhaps to expect more would be asking too much—but I am grateful to the hon. Lady for what she did say.
One very distinguished figure connected with the railways is the Rev. W. Awdry, whose works are well known to the children of this country. He once observed:
There are two ways of running a railway; the Great Western way and the wrong way".
I am glad that the Great Western now has the chance to do it the right way again.

Mr. Andrew Mackinlay: I shall not take any interventions. I am not sponsored by a railway union, but in the abortive legal action that I tried to undertake before Christmas in an attempt to halt the franchising of the London-Tilbury-Southend line the rail unions gave me some assistance with legal expenses.
I am implacably opposed in principle to privatisation of the railways, but, putting that aside, many people who welcome the concept of privatisation still consider the Government's method barmy and foolhardy in the extreme—and that includes some Conservative Members of Parliament. The Conservative-dominated Transport Select Committee has often cautioned the Government about the prudence of the course on which they were embarked, citing especially the problems of inter-ticketing and the transfer of revenues between rail operators.
I am a member of the Transport Select Committee. During hearings, I asked the then Secretary of State for Transport—the right hon. Member for South Norfolk (Mr. MacGregor)—and the chairman of the British Railways Board how there could be transparency and probity when management teams were preparing and marshalling bids at the same time as they were running the railways. That problem is emerging in relation to the LTS line.
The Secretary of State has not given adequate information, to which we are entitled, on when the alleged scam was discovered, by whom, when it began and how widespread it is. It is not sufficient to say that auditors have been called in. He should be able to give us much more information and reassure us that similar problems do not arise—

Mr. Luff: On a point of order, Mr. Deputy Speaker. The hon. Member for Thurrock (Mr. Mackinlay) said that he was not sponsored. Although I accept that an entry in the Register of Members' Interests may change, the register shows clearly that at least a year ago he was sponsored by the Transport and General Workers Union.

Mr. Deputy Speaker: I think that this is the fourth time that a similar point of order has been raised. I have ruled on each occasion. Hon. Members know full well that it is their responsibility to declare interests—indeed, it is a rule of the House that they should do so.

Mr. Mackinlay: The hon. Member for Worcester (Mr. Luff) will notice in Hansard tomorrow that I said with great precision that I was not sponsored by any rail unions. I went on to declare the absolute extent of my involvement with them, which was an attempt to frustrate the decision to franchise LTS in the High Court. The hon. Member really should know the difference. He is a silly Member and I regret that he felt it necessary to interrupt in such a way.
I regret that there have been diversions into people's film careers and into other privatisations and that hon. Members have not addressed the central problems, which is what I will do and why I shall not give way. What reassurance do we have that other similar alleged scams or problems will not arise in interfaces with rail operators such as Thameslink, Network SouthCentral and even down as far as Exeter station? The problems with ticketing and fares could arise again and we want assurances that they will not.
How sure is the Secretary of State that what is clearly an irregularity has not interfered with the tendering process? Can he assure us that it has not given some advantage to Enterprise Rail? If he does not know, he should say so. If he can say that there was no problem, he should do so from the Dispatch Box.
Some Enterprise Rail staff have left the company or been suspended. We are told that Mr. Colin Andrews, the commercial director, has departed. On what terms did he leave? If he resigned, terms must have been established. Has he offered a reason for his resignation? Above all, I want an assurance that no money has been advanced as a sweetener, either for his silence or his swift departure. Mr. Andrews' deputy, the commercial manager, has been suspended. Two area managers, better known as station masters—one at Fenchurch Street and one at Upminster— have also been suspended, as well as two others in the commercial department.
In my experience as a trade union official before I entered the House, it was common place for people to be suspended for two reasons: first, so that they would not be able to influence an inquiry and, secondly, in their own interests to be able to demonstrate that they would not be able to influence an inquiry. Therefore, why has not the managing director, Mr. Kinchin-Smith, been suspended? I do not rush to judge him; I know him. It would be in the interests of everybody, however, including him, if he were not at his desk. Clearly, it is inappropriate for him to stay. Will the Secretary of State tell us why Mr. Kinchin-Smith is still at work?
Mr. Kinchin-Smith was also the architect of the penalty fares scheme. When he was running the LTS line, I told him that many of my constituents considered the scheme foolhardy in the extreme. Legitimate, fare-paying passengers who had wanted to purchase tickets but were unable to do so because ticket machines, even those issuing permits to travel, were not working were embarrassed by the scheme. The scheme was a charter for people who did not wish to pay but who were prepared occasionally without any embarrassment to fork out £10.
It has been discovered that the scheme that Mr. Kinchin-Smith introduced and which he described as the greatest thing since sliced bread has been arbitrarily abandoned. I want to know why. Was London Underground receiving its just receipts? Was it consulted about the abandonment? Were there irregularities in the handling and ending of the penalty fares scheme and, if so, are they the subject of further investigation?
Reference has been made to the franchising director. The Secretary of State has said that he wants the investigation to be conducted thoroughly, and I expect no less of him. When I was spying on the franchising director at Waterloo station on Monday morning, however, he made it abundantly clear to every journalist who was listening that he saw the LTS scandal as a hiccup and


that he hoped—indeed, he was determined—that the LTS franchise would be transferred in three to four weeks' time.
That does not make me confident that the franchising director is not pre-judging the inquiry. Indeed, I regard him as a puppet of the political machine. He is prepared to play the Government's tune, keep his head down and remain determined that the franchise will go through, regardless of what may be discovered. He should resign or be sacked because there is little or no confidence in his stewardship of the LTS franchise and there is little or no confidence in any of the other franchises that have been let.
Unhappily, the South West Trains franchise was wrongly allowed to go ahead on Sunday. The management team, under Mr. Peter Field, marshalled a bid, but it was inconceivable that the Government and the franchising director would let two management bids go ahead. Clearly, room in the garden was guaranteed for Stagecoach and other operators. I am deeply concerned about the way in which the management team at South West Trains was overlooked. It had all the hallmarks of the franchising arrangements for independent television, which resulted in Thames Television's quality bid suffering.
I also noticed on Monday, amid all the trumpeting about two franchises being let, that a Stagecoach bus was parked close to platform 13.1 thought that that was a sign of things to come. Inevitably, over time, Stagecoach will reduce its rail services and introduce coaches if it is allowed to get away with it.
For a number of years I had to spend a great deal of time at Surbiton station. I remember it well. The announcement used to go something like this: "The train arriving on platform 3 will call at Esher, Hersham, Walton, Weybridge, West Weybridge, West Byfleet and Woking. Join the front four cars for Brookwood, Ash Vale, Aldershot, Farnham, Bentley and Alton. The other part of the train is for Worplesdon, Guildford, Farncombe, Godalming, Milford, Witley, Haslemere, Liphook, Liss, Petersfield, Rowlands Castle, Havant, Bedhampton, Fratton and Portsmouth and trains to the Isle of Wight."
Trains would also go to Hinchley Wood, Claygate, Oxshott, Cobham, Effingham Junction, Horsley, Clandon, London Road and Guildford, and going the other way they would stop at Berrylands, New Maiden, Raynes Park, Wimbledon, Earlsfield, Clapham Junction, Vauxhall and Waterloo.
I cite that list because the areas from which many of those great stations take their names are represented by Conservatives Members of Parliament. It needs to be borne in mind that many of those stations will disappear if the franchises are allowed to endure. Where are the right hon. and hon. Members who represent such constituencies as South-West Surrey, Epsom and Ewell, Kingston upon Thames, Richmond and Barnes, Twickenham, Mole Valley and North-West Surrey to speak up for the maintenance of services that will disappear when South West Trains, under Stagecoach, has been operating for a few months and decides that it is necessary to close intermediate stations and end off-peak services? That is what is threatened—if not promised— by the insistence on Stagecoach being awarded the franchise for South West Trains.
When, in a few years' time, people complain that their services have gone, I will point an accusing finger at Conservative Members who acquiesced and voted for the

surrender of our rail services to Stagecoach, a bus company. Tory Members have either boasted about it here today or denied their constituents an opportunity to have their views articulated in the House, because they were not here.

Mr. Brian Wilson: I congratulate my hon. Friend the Member for Thurrock (Mr. Mackinlay) on that virtuoso performance. During his routine involving the lists of stations, I was afraid that he was going to burst into song. If I remember, the next two lines went:
Never paid my fare, man
had no worries nor cares, man".
Fortunately, I am sure that that was not the case with my hon. Friend.
My hon. Friend's speech was in marked contrast to that of the hon. Member for Worcester (Mr. Luff), whose speech gave us a fair indication of why the Tories are in such a disastrous position. Frankly, if he had made that arrogant and complacent speech in defence of rail privatisation at virtually any public gathering in the country, he would have been laughed at in derision. Only here could he be heard, in at least half the premises, with relative respect.
Listening to all the Tory Members with vested interests, I thought that it might not be a bad idea if we adopted some football terminology. In the same way as there is the Beazer Homes League, we had visits earlier from the Hill Samuel right hon. Member for Norfolk, South (Mr. MacGregor), the S. G. Warburg hon. Member for East Surrey (Mr. Atkinson) and, of course, the Lowe Bell hon. Member for Worcester. The idea that vested interests in the House lie among Members on this side of the Chamber, rather than the Tory side—[Interruption.] Of course there are Opposition Members with interests, but I can tell Members where the money is in terms of interests—it is on the Tory side of the Chamber. The Tories are up to their eyes in vested interests in the privatisation of the railways. Perhaps that is why there is such enthusiasm for privatisation among the tiny number of Conservative Members assembled here tonight.
When the Railways Bill was in Committee, I invented a hypothetical private railway company called Spivrail. Tory Members who had sat mute throughout the Committee's proceedings were moved at that point to voluble protest. "What an insult to the ranks of private enterprise," they cried. But in fact, that is exactly what has been put in place—a railway for spivs handed over to them by the Government of sleaze. One more fraud investigation and we may even rename it Sleazerail.
In reality, life has improved upon art. Not even I had anticipated such a series of humiliating fiascos for Ministers in the earliest days of rail privatisation. Let us look at the first three franchises offered. The preferred bidders for Great Western—Resurgence Railways—had to be dropped after we exposed the fact that the managing director had just run a double glazing firm into liquidation, leaving a trail of debt behind it.
The franchising director, who was very accurately portrayed by my hon. Friend the Member for Thurrock, employs hundreds of lawyers at £250 an hour and more to drive the measure through. Why did none of them uncover that minor difficulty in the background of


Resurgence Railways? Personally, I thought it a reasonable idea to check with Companies House, and there was the information available for anyone who wanted to find it. But the Tories, of course, did not want to find it.
At that point, the South West franchise had to be juggled. Otherwise, Ministers would have ended up with three management buy-outs, which would not have said a lot about the level of private sector interest. So Stagecoach suddenly became the preferred bidder—the company with the worst record of anti-competitive practices in the United Kingdom. I can tell the House that the people of the south and south-west ain't seen nothing yet. In Southampton, for instance, Stagecoach is remembered as the company to which the Tories sold the bus company for less than the value of the local bus station, which the entrepreneurial Stagecoach promptly sold off for development. The result is that, to this day, Southampton does not have a bus station. Let us hope that there is some safeguard in the franchise agreement preventing Stagecoach from selling the railway station.
Then we move on to fiasco No. 3—the London-Tilbury-Southend line—and what a cracker that is. Spivrail does indeed live. I love the names that the companies come up with—Resurgence Rail, Enterprise Rail, Victory Rail, Thatcher Rail. How many more of these names will we have? It really is a case of the louder they talk of their honour, the faster we should count the trains as they disappear.
Let us be clear about what has happened with Spivrail—or rather, the London-Tilbury-Southend line, or Enterprise Rail. There has been an absolutely predictable development following the tearing apart of our national rail network into dozens of fragments, each of which owes loyalty only to itself and its prospective shareholders.

Dr. Spink: On a point of order, Madam Speaker. Is it in order for the hon. Gentleman to use the word "spiv"? He is tarring the employees and the management team of that railway line, and he is prejudicing the inquiry that is taking place. Shame on the hon. Gentleman—

Madam Speaker: Order. I have heard nothing that was out of order. I often say in this House that Members are responsible for their own comments.

Mr. Wilson: It was nice to hear from the prisoner's friend.
In the case of the LTS line, the alleged victim was London Underground, but when the Consumers Association recently checked up on the fares being offered where more than one operator was involved, it was clear that the victims were undoubtedly—there are no allegations here—the passengers. A fragmented railway is a bad deal for the taxpayer and for the passenger, and every day that passes confirms the basic lesson that we were preaching when the Railways Bill was introduced.
I wish to make a small inquiry about the LTS scandal. Will the Minister confirm that when the consultants who check travel patterns went to Upminster in December to carry out a routine check, they found that the relevant records had been removed to Southend? The consultants,

by whose assessments the fare revenue is divided up between the operators, were then dependent on information provided by LTS management, rather than randomly selected information. Does that not suggest a degree of premeditation? Why was no action taken on that by the franchising director?
There is a massive vested interest and conflict of interest involved for management teams in the proposed buy-outs. They have all the time and incentive in the world to put schemes in place for the post-privatisation period at the same time as they are supposedly running a public sector railway. That is the problem with management buy-out teams.
I have two proposals to make today. First, in light of what we have learned over the past few days, the embarrassment that the Government have suffered and the clear evidence that this is not restricted to just one franchising operation or prospective operation, the franchising operation should be suspended in its entirety until the investigations are complete. I do not expect the Tories to yield to that, as they are into the scorched earth phase and are trying to push the measure through.
Secondly, as soon as a management buy-out team has notified its interest as a prospective bidder, it should cease to be the management team for that railway until the franchise has been awarded. If that is not done, conflicts of interest will continue to arise.
I have worked with people from all parties in the past three years who have a common concern for our railways. One of those was the late Robert Adley. Two nights before he died, I met Robert Adley in the Member's Lobby. He patted his inside pocket with immense satisfaction and said, "I have got them here—the amendments signed by six Tory Members." Using a code that most of us here will understand, I asked him, "Including the right to bid?" "Of course," he said, "That is the one that matters—that will kill the whole thing."
Two days later, Robert Adley was dead, and the tragedy of historic proportions was that there was no Tory Member to take his place. If there had been, the subsequent course of events would have been very different. The right of British Rail to bid for franchises was, as Robert Adley rightly identified, crucial. If it had had that right, it would have won the franchises—it is as simple as that. That was also recognised by Lords Peyton and Clinton-Davis, and others from all parties who pursued that amendment in the House of Lords.
Eventually, in what seemed at the time to be a success, the Government were forced to concede the principle— although, as always, the precise wording of the amendment was crucial. In the absence of an Adley to hold out for more, the amendment was written to the advantage of those whose aim was still to destroy British Rail and the national rail network. Nine franchises have now been offered, and in each and every case British Rail has been denied the right to bid. In other words, the will of Parliament was cynically and systematically negated to satisfy the obsession with privatisation at all costs.
I hoped that one or two Tory Members might be loyal to the memory of Robert Adley and might do something about it now that the scale of the affront is apparent. Judging from what we have heard today, however, I probably hoped in vain. The refusal to allow British Rail to bid is an affront to Parliament. Parliament would not


have given the Government their legislation without that apparent concession. The Government should never forget that.
Privatisation is a rotten deal for the taxpayer, who has been forced to pay private operators more than British Rail would have required for the same level of service in order to satisfy Ministers' ideological spite. It is also a tragedy for the people who work for the railways, thousands of whom will pay for the franchising process with their jobs. [Interruption.] The Secretary of State mutters from a sedentary position. He complained earlier about being called a right-wing ideologue. Give me a real right-wing ideologue any day rather than a bogus liberal without any principles who plays the role of a right-wing ideologue because that is the prevailing mood of the moment.
If the Secretary of State wants to regain his credentials as the bicycling baronet rather than the right-wing ideologue, there is a simple test for him. He should reopen the LTS franchising procedure and give British Rail the right to bid. Does he have the guts to do that? I doubt it very much—but that is how he will be judged, not on his own self-image.
I am grateful to a financial journalist named Michael Walters of the Daily Mail for what is undoubtedly the best definition of Railtrack privatisation that I have yet seen. He wrote with disarming honesty.
Beneath the financial filigree, Railtrack is a conduit for distributing State moneys to private investors. All being well, the train operating companies collect subsidies and pass them to Railtrack to pay as dividends to shareholders.
There you have it. I particularly like the phrase "all being well".
For anyone deluded enough to believe that rail privatisation has anything to do with quality of service, Mr. Walters was again very helpful in clarifying the position. He wrote:
Forget the frustrations which can actually attend travelling by train. The service itself scarcely counts in the flotation of Railtrack. What matters most is the quality of the financial engineering. The bankers understand that the less popular Railtrack appears, the more of a bargain they will have to make it.
On that point at least, the Tories have triumphed. They are the ultimate financial engineers. Through four Secretaries of State, their success in discrediting rail privatisation could scarcely have been improved upon. In those terms, it has worked.
As my hon. Friend the Member for Birmingham, Ladywood (Ms Short) pointed out, for the purpose of setting access charges the assets of Railtrack were found to be worth £6.5 billion. On that foundation, the whole lunatic system of access charges was based. Now the talk is of selling it off for perhaps a quarter of that. That is financial engineering of the highest quality. It is also part of the reason why Labour cannot and will not acquiesce in the sale of Railtrack.
Let us look at just one example in the most recent piece of financial engineering. The Minister may wish to explain the thinking behind it. Understandably, Railtrack does not want to be liable for compensation to train operators. So, incredibly, the Treasury is to give more money to the train operators so that they can pay it to Railtrack in supplementary access charges, so that Railtrack can pay it back to the train operators as compensation. The net cost to the taxpayer of that one

device will be £84 million in the first year and some £250 million over five years. Let the House be absolutely sure of the bottom line: the Government may be privatising, but in the case of the railways it is the taxpayer who is footing the bill. That is the factor which distinguishes rail privatisation from all previous privatisations and it is crucial in relation to Labour's intentions.
Why should the taxpayer fund the profits of a privately owned Railtrack rather than see every penny of his or her contribution to the railways go into the creation of better, more modern services? What conceivable case is there for the proceeds from the property assets of Railtrack to be converted in future into shareholders' dividends and boardroom salaries rather than ploughed back 100 per cent. into railway investment? Let any potential investor note those words: 100 per cent. There is no such justification, moral, financial or political.

Mr. Riddick: The Leader of the Opposition has talked about his desire to create a stakeholder economy under a Labour Government. Can the hon. Gentleman tell me what he envisages stakeholding would represent in the railways if there were a Labour Government?

Mr. Wilson: There are many ways of stakeholding. At the moment, we are all stakeholders in the railways. We all share a stake in the railways and we shall always do so because as taxpayers we shall all subsidise them, no matter who owns and operates them. Another way of being a stakeholder in the railways is to work for the railways. If the hon. Gentleman's idea of stakeholding is for Stagecoach to come in and make 1,000 people redundant or for Wisconsin Railways to come in and make 4,000 people redundant, that is not my idea of stakeholding.
The kind of stakeholders whom I respect are not just those who own and profit, but those who work and those who travel. That is my idea of stakeholding. That is the kind of railway that we shall have—an expanding railway. People will be able to look across to the continent and say, "Yes, let us have some of that." No Government of any country in the world would be prepared to sacrifice their railway network on the altar of lunatic, bigoted, dogmatic privatisation. The British people do not want it either.
I make Conservative Members one final promise. Let them go ahead with this if they wish. Let them do the vandalism. Let them carry out the scorched earth policy. But let none of them be unaware that they will pay a high electoral and historic price as the party which, in the face of all rational advice, set out to destroy our national rail network.

The Minister for Railways and Roads (Mr. John Watts): The House always enjoys the wild man of the north act from the hon. Member for Cunninghame, North (Mr. Wilson), but much less impressive is his failure to explain clearly his party's position. The hon. Member for Birmingham, Ladywood (Ms Short), had a chance to do so when she opened the debate and the hon. Gentleman has had a chance to do so in replying to the debate, but he has failed. Perhaps nothing different should be expected of a party which in all things says one thing and does another.
I will give the hon. Gentleman an eleventh hour opportunity to answer three key questions. If so-called new Labour ever forms a Government at some time in the future, will Railtrack be renationalised and, if so, how? The hon. Gentleman's leader, the right hon. Member for Sedgefield (Mr. Blair), said at the 1995 Labour party conference that there would be a publicly owned and publicly accountable railway system under a Labour Government. The hon. Member for Wrexham (Dr. Marek), with the honesty that comes from the Back Benches, said that Railtrack must be in public ownership. The hon. Member for Newham, North-West (Mr. Banks) also made his position crystal clear.
On 8 January the hon. Member for Ladywood said:
It is for this reason that we are committed to a publicly owned railway. There is no other way to protect the national interest. We will announce our plans for Railtrack if and when the prospectus is issued".
Perhaps she will humour us on this side of the House and accept that the prospectus will be issued.

Ms Short: Read my speech.

Mr. Watts: Perhaps the hon. Lady would like to tell the House now.

Ms Short: The Minister can read my speech—it was all in there.

Mr. Watts: I listened carefully and there was not an answer to that question.

Ms Short: The Minister wrote his speech before the debate.

Mr. Watts: I did not, and I have made copious notes as I have listened to the debate.
Would new Labour breach new contracts with private franchise operators? Opposition Members seem to despise such operators. Will the contracts entered into with the first two franchise companies and those that will be entered into with the next four and in subsequent tranches be honoured or not? If investment of more than £1 billion a year by Railtrack plus investment by rolling stock companies and train operating companies is inadequate, how much should be invested and who will pay?

Ms Short: It is extraordinary that the Government, who are in the process of implementing a policy, should assume that they are going to lose the election to Labour and therefore spend the whole debate asking the Labour party what it will do about the mess that the Government have created.

Mr. Watts: The hon. Lady said that I should have listened to her speech. She should have listened with greater care to what I said. I asked the hon. Member for Cunninghame, North three questions—one, two, three— about what would happen if so-called new Labour were ever to form a Government. I note that we have still not had any answers to those questions.

Mr. Wilson: Will the hon. Gentleman give way?

Mr. Watts: No.

Mr. Wilson: The Minister asked for answers.

Mr. Watts: If the hon. Gentleman is going to answer the three questions, I willingly give way.

Mr. Wilson: As my hon. Friend the Member for Ladywood said, it is pathetic for the Minister to be asking questions instead of spelling out a policy for the railways. [HON. MEMBERS: "Answer, answer."] If Conservative Members say it three times, I will answer three questions.
First, on Railtrack, we will spell out our precise position on the flotation, which we must. Secondly, on the franchises, we have made our position absolutely clear and specifically answered the question that the Minister asked. Thirdly, on rolling stock it is interesting to note that if the Government had accepted our proposals on leasing railway rolling stock years ago, we would not have lost 8,000 manufacturing jobs in the railway industries, the York carriage works would not be closed and we would have new rolling stock on the London-Tilbury-Southend line. We do not have to take lessons on that because we suggested it to the Government.

Mr. Watts: I noted one answer out of three to the questions that I posed. I am glad to hear from the hon. Gentleman that the contracts with franchise operators will be honoured. It is important to hear that from his mouth, as well as from that of the hon. Member for Ladywood, because sometimes it is not clear who is the principal transport spokesman for the Labour party.
My hon. Friend the Member for Dartford (Mr. Dunn) asked whether Labour spoke for the people or for the trade unions. His question shows why we cannot get a clear answer to my other two queries. It is the fear of its trade union masters that prevents the Labour party from spelling out its policy on the renationalisation of Railtrack and its attitude to investment.
We have often heard allegations that the flexibility allowed in passenger service requirements for a commercial franchise would lead to dramatic cuts in services. It is worth spending a couple of minutes examining how, in practice, the first two private operators have planned their services. Great Western, far from slashing services as was predicted time and time again by the Opposition, is committed to continuing to run at least the current number of services and to reducing journey times. That includes services to Fishguard, which I recall were a central feature of one of our earlier debates. There is a commitment to refurbish rolling stock. The hon. Member for Cunninghame, North, said earlier from a sedentary position, "Ah, a coat of paint." He could not be more wrong. I was talking to Brian Scott, the managing director of Great Western Holdings, on Monday evening at Paddington station.

Mr. Wilson: South West.

Mr. Watts: It is Great Western—Brian Scott. My facts are correct.
I asked Brian Scott when he was going to introduce new livery on the trains. He said that he was in no hurry to do that because he wanted his customers to have refurbished interiors and more comfort inside the trains before turning his attention to cosmetic treatment of the exteriors of the trains. I take great comfort from that.
In the case of South West Trains and Stagecoach, the hon. Member for Cunninghame, North will know that Stagecoach is planning to maintain the current levels of service and make significant improvements in the reliability and the punctuality of the services that it runs.
I say to the hon. Member for Eastleigh (Mr. Chidgey) that Stagecoach has owned South West Trains, by my calculation, for a little under 65 hours. He should be a little more patient and wait to hear details of its investment plans for improving stations and further plans that it may announce in respect of rolling stock. I am sure that the company will be pleased to share its plans in detail with him and with other hon. Members and their constituents whom it serves as customers.
The hon. Member for Thurrock (Mr. Mackinlay), who clearly wants a job as a station announcer—I am sure that he would do it extremely well—asked what assurance there was that there are not other routes where revenue is shared between British Rail subsidiaries and London Underground and where similar irregularities may be taking place. He will have heard my right hon. Friend the Secretary of State explain that in the past few days British Rail has sent its audit teams to all stations where the allocation of revenue between London Underground and British Rail subsidiaries is significant. The result of the checks on those stations revealed one irregularity— at Walthamstow central, involving 30 tickets worth about £250.
The hon. Member for Thurrock also asked me to speculate about the reasons why other employees of LTS Rail have been suspended. It would be unreasonable for me or for anyone else to speculate on reasons for those suspensions until the investigations have been completed and the facts are known. It is unreasonable for those individuals to be placed under suspicion in that way until their role, if any, in those events has been established and we know the full facts.

Mr. Mackinlay: Will the Minister give way?

Mr. Watts: No, I am trying to answer the hon. Gentleman and other hon. Members and I have only five minutes left.
The hon. Member for Thurrock also asked about prejudging the decision on the subsequent award of the franchise for that service. He will have heard my right hon. Friend the Secretary of State say that the franchising director has assured my right hon. Friend that until he, the rail regulator and British Rail are satisfied that the allegations have been investigated fully there can be no question of a transfer of the franchise and that no decisions will be taken until the outcome of the investigations is known.
My hon. Friend the Member for Colne Valley (Mr. Riddick) elicited an interesting view from the hon. Member for Eastleigh, who declared himself within a few breaths both as being in favour of privatisation and as wanting Railtrack to remain nationalised. That is typical of the Liberal party—a policy which allows it to face in both directions at the same time.
My hon. Friend the Member for Colne Valley also mentioned charter services and praised the co-operation between Railtrack and charter operators. He also referred to the difficulties that some operators have had with Rail Express Systems. I share his confidence that now that that

company is in private ownership it will look on charter services as an important market for it to service and an area for growing its businesses.
My hon. Friend the Member for East Surrey (Mr. Ainsworth) reminded the House that nationalisation of British Rail has not worked and said that his support for privatisation was based not on dogma but on a desire for better services for his constituents. He said that they wanted investment, which privatisation will bring, and fares to be controlled in the passenger's interest. He can assure his constituents that they will get it from privatisation.
My hon. Friend the Member for Colne Valley also referred to advertising slogans. I recall that one used by British Rail was "We're getting there". After nearly 50 years of nationalisation, the best that could be claimed for the nationalised rail system was that it was getting there. The train had still not reached the terminus. My hon. Friend also referred to freight. I am confident that privatisation of British Rail's freight businesses will arrest the decline in the amount of freight carried by rail. Like my hon. Friend, I am enthusiastic about the Piggyback proposals which are being examined as part of the project to upgrade the west coast main line.
The hon. Member for Eastleigh, in common with a host of Opposition Members, confused cost and value, as they so often do. It is true that the replacement cost of Railtrack assets has been estimated at £6.5 billion, but that does not mean that that is what they are worth. The flows of funds through Railtrack from track access charges that will be employed in maintaining and upgrading the system will be what adds value to those assets.
Similarly, in relation to ROSCOs, the hon. Member for Eastleigh said that the price paid was a giveaway—he described it as a knock-down price—at £1.8 billion. It is perhaps coincidental that that is the same amount as the written-down value of the physical assets that were acquired. I should like him to explain sometime how it could be in that company's interest to run down its business.
We have heard no answers, except one, to the key questions that the Labour party must answer. For the fifth time since January last year, the Labour party has taken up the House's time to debate privatisation; yet it is unwilling to spell out its plans. I have no hesitation in expressing my confidence that my right hon. and hon. Friends will defeat the Labour motion and support the amendment in the name of my right hon. Friends.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 262, Noes 298.

Division No. 45]
[6.59 pm


AYES


Adams, Mrs Irene
Bayley, Hugh


Ainger, Nick
Beckett, Rt Hon Margaret


Ainsworth, Robert (Cov'try NE)
Berth, Rt Hon A J


Allen, Graham
Bell, Stuart


Anderson, Donald (Swansea E)
Benn, Rt Hon Tony


Anderson, Ms Janet (Ros'dale)
Bennett, Andrew F


Armstrong, Hilary
Benton, Joe


Ashton, Joe
Bermingham, Gerald


Austin-Walker, John
Berry, Roger


Banks, Tony (Newham NW)
Blair, Rt Hon Tony


Barron, Kevin
Blunkett, David


Battle, John
Boateng, Paul






Bradley, Keith
Hanson, David


Bray, Dr Jeremy
Harvey, Nick


Brown, Gordon (Dunfermline E)
Hattersley, Rt Hon Roy


Brown, N (N'c'tle upon Tyne E)
Henderson, Doug


Bruce, Malcolm (Gordon)
Heppell, John


Burden, Richard
Hill, Keith (Streatham)


Byers, Stephen
Hinchliffe, David


Caborn, Richard
Hodge, Margaret


Callaghan, Jim
Hoey, Kate


Campbell, Mrs Anne (C'bridge)
Hogg, Norman (Cumbernauld)


Campbell, Menzies (Fife NE)
Home Robertson, John


Campbell, Ronnie (Blyth V)
Hoon, Geoffrey


Campbell-Savours, D N
Howarth, Alan (Strat'rd-on-A)


Canavan, Dennis
Howarth, George (Knowsley North)


Chidgey, David
Howells, Dr. Kim (Pontypridd)


Chisholm, Malcolm
Hoyle, Doug


Church, Judith
Hughes, Robert (Aberdeen N)


Clapham, Michael
Hughes, Roy (Newport E)


Clark, Dr David (South Shields)
Hughes, Simon (Southwark)


Clarke, Eric (Midlothian)
Hutton, John


Clarke, Tom (Monklands W)
Illsley, Eric


Clelland, David
Ingram, Adam


Clwyd, Mrs Ann
Jackson, Glenda (H'stead)


Coffey, Ann
Jackson, Helen (Shef'ld, H)


Cohen, Harry
Jamieson, David


Connarty, Michael
Janner, Greville


Cook, Frank (Stockton N)
Jones, Barry (Alyn and D'side)


Cook, Robin (Livingston)
Jones, Ieuan Wyn (Ynys Môn)


Corbett, Robin
Jones, Jon Owen (Cardiff C)


Corbyn, Jeremy
Jones, Lynne (B'ham S O)


Corston, Jean
Jones, Martyn (Clwyd, SW)


Cousins, Jim
Jones, Nigel (Cheltenham)


Cunliffe, Lawrence
Jowell, Tessa


Cunningham, Jim (Covy SE)
Kaufman, Rt Hon Gerald


Dalyell, Tarn
Keen, Alan


Davidson, Ian
Kennedy, Jane (Lpool Brdgn)


Davies, Bryan (Oldham C'tral)
Khabra, Piara S


Davies, Chris (Littlebogh & Sdw)
Kilfoyle, Peter


Davies, Rt Hon Denzil (Llanelli)
Kirkwood, Archy


Davies, Ron (Caerphilly)
Lestor, Joan (Eccles)


Denham, John
Liddell, Mrs Helen


Dewar, Donald
Litherland, Robert


Dixon, Don
Livingstone, Ken


Dobson, Frank
Lloyd, Tony (Stretford)


Donohoe, Brian H
Llwyd, Elfyn


Dunwoody, Mrs Gwyneth
Loyden, Eddie


Eagle, Ms Angela
Lynne, Ms Liz


Eastham, Ken
McAllion, John


Etherington, Bill
McAvoy, Thomas


Evans, John (St Helens N)
McCartney, Ian


Ewing, Mrs Margaret
McCartney, Robert (North Down)


Fatchett, Derek
Macdonald, Calum


Faulds, Andrew
McFall, John


Field, Frank (Birkenhead)
McKelvey, William


Fisher, Mark
Mackinlay, Andrew


Flynn, Paul
McLeish, Henry


Foster, Rt Hon Derek
Maclennan, Robert


Foster, Don (Bath)
McMaster, Gordon


Foulkes, George
MacShane, Denis


Fyfe, Maria
McWilliam, John


Galbraith, Sam
Madden, Max


Galloway, George
Maddock, Diana


Gapes, Mike
Mahon, Alice


Garrett, John
Mandelson, Peter


George, Bruce
Marek, Dr John


Gerrard, Neil
Marshall, David (Shettleston)


Gilbert, Rt Hon Dr John
Martin, Michael J (Springburn)


Godman, Dr Norman A
Martlew, Eric


Godsiff, Roger
Maxton, John


Golding, Mrs Llin
Meacher, Michael


Gordon, Mildred
Meale, Alan


Griffiths, Nigel (Edinburgh S)
Michael, Alun


Griffiths, Win (Bridgend)
Michie, Bill (Sheffield Heeley)


Grocott, Bruce
Michie, Mrs Ray (Argyll & Bute)


Gunnell, John
Milburn, Alan


Hall, Mike
Miller, Andrew





Mitchell, Austin (Gt Grimsby)
Sheerman, Barry


Moonie, Dr Lewis
Sheldon, Rt Hon Robert


Morgan, Rhodri
Shore, Rt Hon Peter


Morley, Elliot
Short, Clare


Morris, Rt Hon Alfred (Wy'nshawe)
Simpson, Alan


Morris, Estelle (B'ham Yardley)
Skinner, Dennis


Morris, Rt Hon John (Aberavon)
Smith, Andrew (Oxford E)


Mowlam, Marjorie
Smith, Chris (Isl'ton S & F'sbury)


Mudie, George
Smith, Llew (Blaenau Gwent)


Mullin, Chris
Snape, Peter


Murphy, Paul
Soley, Clive


Nicholson, Emma (Devon West)
Spearing, Nigel


Oakes, Rt Hon Gordon
Spellar, John


O'Brien, Mike (N W'kshire)
Squire, Rachel (Dunfermline W)


O'Brien, William (Normanton)
Steinberg, Gerry


O'Hara, Edward
Stott, Roger


Olner, Bill
Strang, Dr. Gavin


O'Neill, Martin
Straw, Jack


Orme, Rt Hon Stanley
Sutcliffe, Gerry


Parry, Robert
Taylor, Mrs Ann (Dewsbury)


Pearson, Ian
Taylor, Matthew (Truro)


Pendry, Tom
Touhig, Don


Pickthall, Colin
Trickett, Jon


Pike, Peter L
Turner, Dennis


Prentice, Bridget (Lew'm E)
Tyler, Paul


Prentice, Gordon (Pendle)
Vaz, Keith


Primarolo, Dawn
Wallace, James


Purchase, Ken
Walley, Joan


Quin, Ms Joyce
Wardell, Gareth (Gower)


Radice, Giles
Wareing, Robert N


Randall, Stuart
Watson, Mike


Raynsford, Nick
Wicks, Malcolm


Reid, Dr John
Wigley, Dafydd


Rendel, David
Williams, Rt Hon Alan (SW'n W)


Robertson, George (Hamilton)
Williams, Alan W (Carmarthen)


Robinson, Geoffrey (Co'try NW)
Wilson, Brian


Robinson, Peter (Belfast E)
Winnick, David


Roche, Mrs Barbara
Wise, Audrey


Rooker, Jeff
Wray, Jimmy


Rooney, Terry
Wright, Dr Tony


Ross, Ernie (Dundee W)
Young, David (Bolton SE)


Rowlands, Ted



Ruddock, Joan
Tellers for the Ayes:


Salmond, Alex
Mr. John Cummings and Mr. Greg Pope.


Sedgemore, Brian





NOES


Ainsworth, Peter (East Surrey)
Bowden, Sir Andrew


Aitken, Rt Hon Jonathan
Bowis, John


Alexander, Richard
Boyson, Rt Hon Sir Rhodes


Alison, Rt Hon Michael (Selby)
Brandreth, Gyles


Allason, Rupert (Torbay)
Brazier, Julian


Amess, David
Bright, Sir Graham


Arbuthnot, James
Brooke, Rt Hon Peter


Arnold, Jacques (Gravesham)
Brown, M (Brigg & Cl'thorpes)


Ashby, David
Browning, Mrs Angela


Atkins, Rt Hon Robert
Bruce, Ian (Dorset)


Atkinson, David (Bour'mouth E)
Bums, Simon


Atkinson, Peter (Hexham)
Burt, Alistair


Baker, Nicholas (North Dorset)
Butcher, John


Baldry, Tony
Butler, Peter


Banks, Matthew (Southport)
Butterfill, John


Banks, Robert (Harrogate)
Carlisle, John (Luton North)


Bates, Michael
Carlisle, Sir Kenneth (Lincoln)


Batiste, Spencer
Carrington, Matthew


Beggs, Roy
Carttiss, Michael


Bellingham, Henry
Cash, William


Bendall, Vivian
Channon, Rt Hon Paul


Beresford, Sir Paul
Chapman, Sir Sydney


Biffen, Rt Hon John
Churchill, Mr


Body, Sir Richard
Clappison, James


Bonsor, Sir Nicholas
Clark, Dr Michael (Rochford)


Booth, Hartley
Clarke, Rt Hon Kenneth (Ru'clif)


Boswell, Tim
Clifton-Brown, Geoffrey


Bottomley, Peter (Eltham)
Coe, Sebastian


Bottomley, Rt Hon Virginia
Colvin, Michael






Congdon, David
Heathcoat-Amory, David


Conway, Derek
Hendry, Charles


Coombs, Anthony (Wyre For'st)
Heseltine, Rt Hon Michael


Coombs, Simon (Swindon)
Higgins, Rt Hon Sir Terence


Cope, Rt Hon Sir John
Hill, James (Southampton Test)


Cormack, Sir Patrick
Hogg, Rt Hon Douglas (G'tham)


Couchman, James
Horam, John


Cran, James
Hordern, Rt Hon Sir Peter


Currie, Mrs Edwina (S D'by'ire)
Howard, Rt Hon Michael


Curry, David (Skipton & Ripon)
Howell, Rt Hon David (G'dford)


Davis, David (Boothfeny)
Howell, Sir Ralph (N Norfolk)


Day, Stephen
Hughes, Robert G (Harrow W)


Deva, Nirj Joseph
Hunt, Rt Hon David (Wirral W)


Devlin, Tim
Hunt, Sir John (Ravensbourne)


Dicks, Terry
Hunter, Andrew


Dorrell, Rt Hon Stephen
Hurd, Rt Hon Douglas


Douglas-Hamilton, Lord James
Jack, Michael


Dover, Den
Jenkin, Bernard


Duncan, Alan
Jessel, Toby


Duncan-Smith, lain
Johnson Smith, Sir Geoffrey


Dunn, Bob
Jones, Gwilym (Cardiff N)


Durant, Sir Anthony
Jones, Robert B (W Hertfdshr)


Eggar, Rt Hon Tim
Jopling, Rt Hon Michael


Elletson, Harold
Kellett-Bowman, Dame Elaine


Emery, Rt Hon Sir Peter
Key, Robert


Evans, David (Welwyn Hatfield)
King, Rt Hon Tom


Evans, Jonathan (Brecon)
Kirkhope, Timothy


Evans, Nigel (Ribble Valley)
Knapman, Roger


Evans, Roger (Monmouth)
Knight, Mrs Angela (Erewash)


Evennett, David
Knight, Rt Hon Greg (Derby N)


Faber, David
Knight, Dame Jill (Bir'm E'st'n)


Fabricant, Michael
Knox, Sir David


Fenner, Dame Peggy
Kynoch, George (Kincardine)


Field, Barry (Isle of Wight)
Lait, Mrs Jacqui


Fishburn, Dudley
Lamont, Rt Hon Norman


Forsyth, Rt Hon Michael (Stirling)
Lang, Rt Hon Ian


Forsythe, Clifford (S Antrim)
Lawrence, Sir Ivan


Forth, Eric
Leigh, Edward


Fowler, Rt Hon Sir Norman
Lennox-Boyd, Sir Mark


Fox, Dr Liam (Woodspring)
Lester, Sir James (Broxtowe)


Fox, Sir Marcus (Shipley)
LJdington, David


Freeman, Rt Hon Roger
Lilley, Rt Hon Peter


French, Douglas
Lloyd, Rt Hon Sir Peter (Fareham)


Fry, Sir Peter
Lord, Michael


Gale, Roger
Luff, Peter


Gallie, Phil
Lyell, Rt Hon Sir Nicholas


Gardiner, Sir George
MacGregor, Rt Hon John


Garnier, Edward
MacKay, Andrew


Gill, Christopher
Maclean, Rt Hon David


Gillan, Cheryl
McNair-Wilson, Sir Patrick


Goodlad, Rt Hon Alastair
Maitland, Lady Olga


Goodson-Wickes, Dr Charles
Major, Rt Hon John


Gorman, Mrs Teresa
Malone, Gerald


Gorst, Sir John
Mans, Keith


Grant, Sir A (SW Cambs)
Marland, Paul


Greenway, Harry (Ealing N)
Marshall, John (Hendon S)


Greenway, John (Ryedale)
Marshall, Sir Michael (Arundel)


Griffiths, Peter (Portsmouth, N)
Martin, David (Portsmouth S)


Gummer, Rt Hon John Selwyn
Mates, Michael


Hague, Rt Hon William
Mawhinney, Rt Hon Dr Brian


Hamilton, Rt Hon Sir Archibald
Mayhew, Rt Hon Sir Patrick


Hamilton, Neil (Tatton)
Mellor, Rt Hon David


Hampson, Dr Keith
Merchant, Piers


Hanley, Rt Hon Jeremy
Mills, lain


Hannam, Sir John
Mitchell, Andrew (Gedling)


Hargreaves, Andrew
Molyneaux, Rt Hon Sir James


Harris, David
Monro, Rt Hon Sir Hector


Hawksley, Warren
Montgomery, Sir Fergus


Hayes, Jerry
Neubert, Sir Michael


Heald, Oliver
Newton, Rt Hon Tony


Heath. Rt Hon Sir Edward
Nicholls, Patrick





Nicholson, David (Taunton)
Stern, Michael


Norris, Steve
Stewart, Allan


Onslow, Rt Hon Sir Cranley
Sumberg, David


Oppenheim, Phillip
Sweeney, Walter


Ottaway, Richard
Sykes, John


Paice, James
Tapsell, Sir Peter


Patnick, Sir Irvine
Taylor, Ian (Esher)


Patten, Rt Hon John
Taylor, Rt Hon John D (Strgfd)


Pattie, Rt Hon Sir Geoffrey
Taylor, Sir Teddy (Southend, E)


Pawsey, James
Temple-Morris, Peter


Peacock, Mrs Elizabeth
Thomason, Roy


Pickles, Eric
Thompson, Sir Donald (C'er V)


Porter, Barry (Wirral S)
Thompson, Patrick (Norwich N)


Porter, David (Waveney)
Thornton, Sir Malcolm


Portillo, Rt Hon Michael
Thurnham, Peter


Powell, William (Corby)



Rathbone, Tim
Townsend, Cynl D (Bexl'yn'tn)


Redwood, Rt Hon John
Tracey, Richard


Renton Rt Hon Tim
Tredinnick, David


Richards Rod
Trend, Michael


Riddick, Graham
Trimble, David


Rifkind, Rt Hon Malcolm
Trotter, Neville


Robathan, Andrew
Twinn, Dr Ian


Roberts, Rt Hon Sir Wyn
Vaughan, Sir Gerard


Robinson, Mark (Somerton)
Viggers, Peter


Roe, Mrs Marion (Broxboume)
Waldegrave, Rt Hon William


Rowe, Andrew (Mid Kent)
Walker, Bill (N Tayside)


Rurnbold, Rt Hon Dame Angela
Waller, Gary


Ryder, Rt Hon Richard
Ward, John


Sackville, Tom
Wardle, Charles (Bexhill)


Sainsbury, Rt Hon Sir Timothy
Waterson, Nigel


Scott, Rt Hon Sir Nicholas
Watts, John


Shaw, David (Dover)
Wells, Bowen


Shaw, Sir Giles (Pudsey)
Wheeler, Rt Hon Sir John


Shephard, Rt Hon Gillian
Whitney, Ray


Shepherd, Sir Colin (Hereford)
Whittingdale, John


Shepherd, Richard (Aldridge)
Widdecombe, Ann


Shersby, Sir Michael
Wiggin, Sir Jerry


Sims, Roger
Wilkinson, John


Skeet Sir Trevor



Smith, Tim (Beaconsfield)
Willetts, David


Smyth The Reverend Martin
Wilshire, David


Soames, Nicholas
Winterton, Mrs Ann (Congleton)


Spencer, Sir Derek
Winterton, Nicholas (Macc'f'ld)


Spicer, Sir James (W Dorset)
Wolfson, Mark


Spicer, Sir Michael (S Worcs)
Wood, Timothy


Spink, Dr Robert
Yeo, Tim


Spring, Richard
Young, Rt Hon Sir George


Sproat, lain



Squire, Robin (Hornchurch)
Tellers for the Noes:


Stanley, Rt Hon Sir John
Mr. Patrick McLoughlin and Mr. Gary Streeter.


Steen, Anthony

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the Government on the progress that it is making with privatisation, particularly with the start of private passenger services on the South West and Great Western lines, offering the prospects of better services and higher investment at less cost to the taxpayer; recognises that this demonstrates that the Opposition's attempt to halt privatisation has failed; and looks forward to the flotation of Railtrack in May as an opportunity for the railways to access private finance for investment.

Post Office Privatisation

Madam Speaker: I have selected the amendment standing in the name of the Prime Minister.

Mrs. Margaret Beckett: I beg to move,
That this House opposes the Prime Minister's stated intention to reopen the question of the privatisation of Royal Mail and Parcelforce; records its concern that such a privatisation by Her Majesty's Government would threaten the close co-operation which exists between the Royal Mail, Parcelforce and Post Office Counters and places in commercial jeopardy post offices and sub post offices in communities where presently they play a vital role; believes that the Government should safeguard the universal access and uniform pricing of this country's postal services; recognises that the Post Office does not call for or receive a subsidy from the public purse; and is of the view that British customers will continue to have the best opportunity of enjoying this standard of service only if the Post Office remains as a single corporation within public ownership.
One of the gravest charges that may be laid at the door of the present Government is that they have ceased to serve Britain's national interests. In fact it sometimes appears that, obsessed as they are by the Conservative party's interests and divisions, they have ceased even to recognise that such a thing as the national interest exists. In few areas of policy is that more blatantly the case than in their approach to the future and potential for development of Britain's Post Office.
It is not disputed, even by the Government, that our publicly owned and run Post Office is efficient, well run and profitable. Not only is it without subsidy, but it makes substantial contributions to the Exchequer. It is, in short, a public sector success story, and not only that but a British success story; but the Government steadfastly refuse to acknowledge that because it does not fit their blind ideology.
Nor is it disputed that, given the opportunity, the Post Office might further develop its commercial potential, with advantage to the public. The Post Office and the private sector believe that there is special potential advantage to be gained by successful public-private partnerships, which might readily be developed if Britain's Post Office were to be given the commercial freedoms enjoyed by similar organisations in other states of the European Union.
Under successive boards and chief executives, the Post Office has brought pressure to bear on the Government to take what appeared to most observers to be the requisite common-sense decisions. The response has been a blank rejection, accompanied by the dogmatic incompetence that is the Government's dubious hallmark.
As long ago as February 1994, representatives of the Post Office told the all-party Select Committee on Trade and Industry that there was a sense of approaching crisis due to indecision about the future of the Post Office. By then, its structure had been under review since July 1992. Post Office management, the work force, the Select Committee and even, it seems to me, some of the private sector competitors of the Post Office all seemed to believe that the Post Office was being messed about by the Government to the detriment of its ability to deliver its present services and of its competitive potential.
In June 1994, after that two-year review, the Government finally produced their Green Paper, in which they explicitly endorsed the opinion, expressed in the Select Committee report, that the Post Office

cannot be retained in its present form".
Three options were discussed. They were full privatisation, commercial freedom without a change of ownership in the public sector, and splitting up of the Post Office accompanied by partial privatisation—the Government's preferred option.
No mention had been made of the privatisation of the Post Office—a major piece of policy—in the 1992 Conservative general election manifesto. In fact, as my hon. Friend the Member for Livingston (Mr. Cook) pointed out, even Margaret Thatcher ruled out privatisation of the Post Office, saying:
I have indicated that the Royal Mail would not be privatised. People feel very strongly about it, and so do I.
It became obvious, however, as soon as the Government had made their proposals, that the chief, if not almost the only, beneficiaries would be the City institutions and advisers on whom the Government have lavished so many millions of taxpayer's money, and that the chief losers would be the public, whose money was being spent, and especially members of the public for whom the local post office or the postal services represent a lifeline. The Labour party and the Post Office unions set in train a strong public campaign which received an equally strong public and parliamentary response. Then, as now, it showed that the Government are completely out of touch with public opinion. Of nearly 16,000 responses to the Green Paper, only 60 favoured privatisation. The Government were forced to back down and their resentment was evident—I do not think that it is too much to say that they sulked. However, it appeared that the Government had accepted—with much bad grace— the rejection of their proposals.
As they had been forced to acknowledge that there should be change if the Post Office were to continue to be at the leading edge in the development of communication services, pressure mounted afresh on the Government to accept reality and to allow the greater commercial freedoms from which the Post Office has clearly demonstrated it can benefit. A further report from the all-party Select Committee in January 1995 made such a recommendation. It also said:
The continuing uncertainty over the future of the Post Office benefits no-one except foreign competitors".
The Select Committee's next point was even more relevant. It stated:
Whatever the Government's response, it is essential that a clear statement be made, either that specific changes will be adopted and implemented without delay or that there will be no change in the status of the Post Office for the foreseeable future".
The Select Committee went on to call for stability so that the Post Office could get on with developing its services.
For a brief halcyon period it looked as though at least a little sanity had set in. In May 1995, the then Secretary of State—I beg his pardon, I mean the President of the Board of Trade and Secretary of State for Trade and Industry—the present Deputy Prime Minister and First Secretary of State, who might be thought, in view of all those titles, to be speaking for the Government of which his membership is described in such exhaustive terms, told the House that the Government had, in effect, accepted representations from the Post Office that the scale of its contributions to Treasury coffers was hindering its ability to invest and almost wiping out its profits. He said that a fairer level of return would allow


the Post Office to finance investment in new technology, which would enhance both productivity and competitiveness.
On 11 May 1995 the right hon. Member for Henley (Mr. Heseltine) responded to the Trade and Industry Select Committee's call for
an EFL set by reference to an agreed percentage of planned profits".
He suggested that the Government's previous practice of milking the Post Office for revenue to the detriment of the service it might provide would cease—or at least that is what those who heard him thought that he told the House. He said:
I am prepared to agree that in future we shall aim to set the EFL at about half the Post Office's forecast post-tax profit. I hope to make progress in that direction this autumn.
That would have still resulted in a contribution from the Post Office to the Exchequer of about £172 million this financial year. The right hon. Gentleman went even further and said that, because the Government wanted to discuss arrangements with the management of the Post Office for
a more stable relationship in the future … we have attempted to quantify, within the constraints that I have set out, what that EFL might look for in the future".—[Official Report, 11 May 1995; Vol. 259, c. 885–87.]
As late as September 1995, the right hon. Gentleman commissioned KPMG Management Consulting to produce a report after plans for privatisation had been abandoned. The report, which was leaked to the Financial Times, was said to agree on the value and effect of such investment and to suggest that it would open up the possibility that postal charges would not have to rise until the end of the century. That would benefit the public and commercial users of the Post Office, as well as making it far more competitive.
Then came last November's Budget, when the Government announced a change in the financing arrangements for the Post Office. Without consultation even with the Post Office board, the Chancellor announced that, on top of the £1.25 billion that the Post Office has contributed to the public purse over the past 10 years, it is to contribute a further £900 million—almost as much again—over the next three years alone. That is almost £1 million a day. As the Post Office pointed out, that was the biggest Government financial demand in its history, which followed hard on the heels of the biggest Government financial demand on British taxpayers levied in recent Budgets.

Mr. Edward Leigh: I am very interested in what the hon. Lady is saying. Will she commit a future Labour Government to taking only half the profits of the Post Office if it were under their control?

Mrs. Beckett: At the moment we are concerned with the policy of the Government. We shall have to review a whole range of matters—some of which may be raised later in the debate—about the future policy of the Post Office should we be successful at the next general election. In the meantime and for the next three years— which takes us to the deadline for the next general election—the Post Office will be milked of its profits. Does the hon. Member for Gainsborough and Horncastle

(Mr. Leigh) support that policy or will he support us in the Lobby tonight? He is clearly interested in these matters, as he said a moment ago. Does he support the Government's policy? I look forward to seeing him in our Lobby tonight; I am sure that that was the purport of his intervention.
As I said, almost £1 million will be extracted from the Post Office every day. The Post Office has made a record-breaking profit, yet when it has paid the levy and its corporation tax, it could end up in the red. Once again, most of us will lose. It is not enough that the Government's general tax increases since 1992 are still equivalent to 6p on the basic rate of tax for a typical family. Now the people of this country must pay another Tory tax in the form of higher postal charges—a "stamp tax"—because that is inevitably how most of the cash demand will have to be financed.
Furthermore, British business will face another tax, as business users of our postal services have pointed out. I do not know whether the Secretary of State has seen the most recent issue of The House Magazine, but I draw his attention to a joint advertisement which contains quite a plain message from business users of Post Office services. They point out that, as a result of the Government's policies, jobs will be lost in their industries. They, too, no longer feel safe with the Tories.
The Post Office board is faced with complete disruption of its financial management entirely out of the blue. Its chances of beating off competition from other European Union countries are seriously diminished. The folly of the decision is not all that is remarkable. It is clearly an abrupt and a complete reversal of the policy announced less than six months previously by the right hon. Member for Henley, the Deputy Prime Minister.
This shabby little episode shows once again how dangerous it is to rely on anything that Ministers say. Faced with the contradiction between those assurances and the Government's actions, the Secretary of State could mutter only that his predecessor had said it was "an aim" to move in that direction, rising magnificently above the clear evidence that the Government have lurched in the opposite direction.
Now we have the final stupidity of yet another lurch to the right. Speaking on the "Breakfast with Frost" programme, the Prime Minister told the nation that, if re-elected, the Government would embark yet again on the dogmatic and unnecessary folly of Post Office privatisation. That is yet another example of why the Post Office, like Britain's future, is not safe in the Government's hands.
The Labour party rejects privatisation of the Post Office. It is unnecessary because the Post Office is already achieving standards that are the envy of the world, despite the difficulties that the Government place in its path. Privatisation would undermine the public service ethos of the Post Office, which is one of the reasons why it has achieved those high standards. Under the Conservatives, consumers can expect a postal charge increase, the sell-off of Crown post offices without proper public consultation, and the privatisation of Royal Mail and Parcelforce. Those policies are bound to lead to a threat to the high standards of postal service that we now enjoy, with postal deliveries to all parts of Britain at a common price.
That is not just evidence of the Government's neglect of Britain's commercial interests if it conflicts with that which the right of the Conservative party wants to hear or


of the degree to which the Government are out of touch even with their own supporters. More gravely, it shows that the Government utterly fail to understand that public services such as the railways or the Post Office do not just underpin the community but help to create community— especially in rural areas. They are services without which communities cannot survive.
Opinion polls consistently show great public support for the Post Office and concern at the threat to its future posed by Government policies. In recent months, many Conservative Members have registered their concerns about post office closures, and those of Crown offices in particular.
The Government's case for privatising services such as the Post Office is that commercial freedom is incompatible with the service's place in the public sector. That is just the kind of commercial freedom that the Government have been prepared to offer other public sector organisations. The most recent example is the BBC, but there are others. When the right hon. Member for Henley came under pressure when giving evidence to the Select Committee on that point, his argument seemed to terminate with the fact that it would be a matter of policy, as to whether or not commercial freedom for the Post Office could be undertaken—and as it was not Government policy, it was therefore impossible. That circular and self-satisfying argument clearly does not address the case.
The Government's other argument is neatly self-fulfilling—that privatisation is necessary because Government interferes in a public sector Post Office to its disadvantage. They claim that the way to protect the Post Office from the Government's incompetence, stupidity and short-sightedness is to remove the Post Office from their control. At last, we are on common ground. However, the way to protect the Post Office is not to put it in the private sector but to put the Government out of power.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang): I beg
to move, to leave out from "House" to the end of the Question and to add instead thereof:
welcomes the substantial benefits which have flowed to customers from the Government's programme of privatisation; recognises that 19,000 of the 20,000 post offices in the United Kingdom are already in the private sector; and endorses the Government's continuing commitment to a universal postal service at a uniform and affordable tariff and a nationwide network of post offices.".
This evening's debate was trailed as being about the "threat" of Post Office privatisation. The word "threat" begs a large question. As I shall now show, before I deal with the specific issues of the Post Office, privatisation does not represent a threat. On the contrary, it provides the conditions for enterprise and success—
the enterprise of the market and the rigour of competition",
to quote the Labour party's new clause IV.
The privatisation programme is one of the great successes of this enterprising Government. The only threat that it presents is to the cherished but discredited dogma of nationalisation that is central to the beliefs of many in the Labour party. We were told that new clause

IV was meant to signal a change of heart by the Labour party. We knew that the right hon. Member for Derby, South (Mrs. Beckett) thought differently. Before clause IV was changed, the right hon. Lady said:
I am not against Clause IV.
She said also:
And changing it would give the wrong signal to the party.
She went on to say that there were
circumstances in which I would want to see a return to public ownership—for example, in the water industry.
Perhaps the right hon. Lady can explain. Will that feature in Labour's election manifesto? Is nationalisation back on the agenda? Or is no one paying any attention to the right hon. Lady?
The motion for today's debate gives the lie to Labour's attempts to portray a change in attitude. Even the late Leader of the Opposition was far more enlightened than his party seems to be today. He told us, "Ownership is irrelevant." Clearly not in Labour's stakeholder economy. Continuing to parrot their opposition to privatisation and extolling the benefits of state control would appear to be integral to stakeholding. After the successes of our privatisation programme, however, it is not now so much about controlling the commanding heights as about the commanding stakes. Who is going to be holding them?
We know all about the trade unions—those great upholders of principle who condemn privatisation while they make a tidy profit on the back of the success of privatised industries and then, no doubt, use those resources to help sponsor Labour Members of Parliament who they put up to oppose privatisation. There is no doubt either that that is Labour's idea of a virtuous circle.
If there is a threat to our economy, it comes not from privatisation, which taken as a whole has dramatically enhanced our economic performance, but from the right hon. Lady who supported Arthur Scargill and his striking miners, backed the "resolve" and "fortitude" of the Wapping strikers, wanted to keep clause IV, called for a return to secondary picketing, backs a national minimum wage, supports the social chapter, wants a training tax on industry and would clearly revel in some meddlesome stakeholding. The real threat to the Post Office would come if the right hon. Lady and her trade union friends ever got a chance to put that agenda into practice.
Privatisation has brought many benefits. They include benefits to the taxpayer from revenues totalling almost £60 billion and the £55 million in corporation tax that is paid to the Exchequer each and every week—where before, nationalised industries cost £50 million a week. It has brought benefits to customers. BT's prices are down by 40 per cent., gas prices are down by 23 per cent. and electricity prices are down by 7 per cent—all after taking inflation into account.

Mr. Michael Connarty: It is clear to everyone that the external financing limit set by the Government is about to put up prices in the Post Office. May we return to the Government's hand in the Post Office, which is taking so much from that service's investment plans?

Mr. Lang: In due course. I am talking about the benefits of privatisation. It brings benefits to employees, who have been given the opportunity to own shares in


their companies. Ninety-five per cent. of BT's employees took that opportunity, as did nine out of 10 British Aerospace employees. Labour would have denied them that opportunity, just as it would deny that opportunity to the employees of British Energy and Railtrack. Seven million more shareholders today have a stake—a real stake—in British industry. Labour says that it supports wider employee share ownership, while opposing it at every turn. It is yet more of the say one thing, do another politics of the Labour party.
The motion talks about the threat of privatisation. Perhaps Labour Members should visit some of the industries that we have privatised. Try telling British Aerospace, which is now the UK's largest industrial exporter and the largest defence contractor in Europe, about that threat. Try telling British Airways, which is now the most profitable airline in Europe and one of the most profitable in the world, about the threat. Rolls-Royce has more than tripled its share of the world's civil aeronautical engine business since privatisation. British Steel is now one of the most efficient steel producers in the world, exporting half its output. Try telling those companies about the threat of privatisation. It is nonsense, and ideological nonsense at that. All those companies have seen privatisation as an opportunity, and acted on it—and our economy has been the main beneficiary.
The debate so far has illustrated once again the Opposition's reluctance to face reality about the future of the Post Office and postal services in the UK. They take refuge in complacency, distortion of the arguments and whipping up unfounded fears about the future provision and level of postal and Post Office services. The Government's position and policy on the Post Office is clear. The Green Paper "The Future of the Post Office", published in June 1994, set out the case for changes that we believe will be necessary in the not too distant future if the Post Office is to remain successful in the face of the threats and opportunities that all its main businesses must face.

Ms Judith Church: If the Secretary of State felt that Post Office privatisation was such a good idea in 1994, why did the Government not proceed with it then, or include such a proposal in the Queen's Speech for this Session?

Mr. Lang: It is well known that the Government decided that there was insufficient parliamentary support, so pursued an alternative course in the interim.
The competition is growing and includes the fax, the telephone, electronic mail, couriers, British private sector companies that can be seen on the streets every day, such as Securicor and Business Post, foreign companies that run giant international delivery networks, such as DHL, Federal Express, UPS and TNT, and the privatised Dutch postal services. No doubt other countries' postal services are on the way.
Although it has not proved possible to move forward with changes in this Parliament, the Government have never sought to conceal their view that a future change to some form of private sector status for major elements of Post Office business is essential to remove the public sector constraints that inhibit its prospects.
The Opposition motion is completely misguided when it talks of the privatisation of the Post Office, as it ignores the fact that 19,000 of the 20,000 post offices in the

United Kingdom are already in the private sector. They are private businesses already. Far from being a threat, they are the backbone of the industry and the lifeblood of many small communities all over the country.
The Government set out in the June 1994 Green Paper proposals for the changes that would enable the Post Office to meet the major challenges it will face over the next decade. Our preferred option was to move to joint ownership by the Government, the public and employees of Royal Mail and Parcelforce. Under that option, a retained Government share stake of 49 per cent. would maintain a close link between the Government and Royal Mail, safeguarding the interests of consumers in essential public services while giving the business the commercial freedom it needs to respond to increasing competition and to develop new services for the benefit of consumers.
The Government concluded that the strength of the Post Office network lies in the existing public and private partnership which combines national provision for the size and activities of the network with local private sector provision for the delivery of services to customers.
No change to the ownership or structure of Post Office Counters was therefore proposed. This option had the support of the Federation of Sub-Postmasters. I remind the House of what it said:
The Federation warmly welcomes and supports the majority of the Government's proposals for the Counters Business and we see them, together with the commitment to retain Benefits Agency work at Post Office counters as critical for the future of sub-post offices.
In the absence of the necessary level of support in the House to proceed with legislation to advance our preferred option for Royal Mail and Parcelforce, the Government set out last May, in the statement by my predecessor and right hon. Friend the Deputy Prime Minister, to which the right hon. Lady referred, a number of pragmatic changes in the financial regime of the Post Office which I shall address shortly.
The Government remain of the view, however, that the proposals I have described for the Royal Mail and Parcelforce would be in the best interests of the Post Office and its customers. It is in that context that, in a recent television interview, my right hon. Friend the Prime Minister indicated that consideration would be given to including proposals in our manifesto for the next election. This means no more and no less than it says.
Whatever the Government decide in due course to propose in our manifesto, I emphasise once again that the Government have an absolute and non-negotiable commitment to a universal letter and parcel service with a delivery to every address in the United Kingdom within a uniform and affordable tariff structure and a nationwide network of post offices. That has been, and always will be, central to any proposal for change.

Sir David Mitchell: Will my right hon. Friend comment on the suggestion that the ability to service all addresses, including many in rural areas that cost the Post Office a great deal to reach, is best safeguarded by the continuation of an expanding and profitable Post Office business which in turn can best be achieved in the private sector?

Mr. Lang: My hon. Friend has an extremely sound and valid point and I take serious account of it.

Mrs. Beckett: I do not want to detain the Secretary of State, but in view of his hon. Friend's intervention just


now I remind him that he seems to have overlooked the phrase in the evidence given by the Federation of Sub-Postmasters which states:
The Federation remains of the view that ownership should not be at the forefront of Government consideration, the key issue … being the need to improve the commercial prospects
of the network.

Mr. Lang: The federation is involved with ownership of sub-post offices, 19,000 out of 20,000 of which are in the private sector already. That is the point the right hon. Lady seems unable to grasp.
I have already referred to the threats and opportunities that face the Post Office, such as fax machines, electronic mail and the telephone. Real costs in these areas are falling fast, making them even more competitive. Changes are necessary to enable Royal Mail to respond to the challenges and opportunities it faces. It is increasingly clear that the present public sector approach is not flexible enough to allow the management to respond properly to the competitive pressures. The all-party Trade and Industry Committee's report of 1994 concluded that the various public sector constraints on the Post Office's activities were
having a detrimental impact on the Post Office's ability to act as a commercial organisation, to deliver an ever higher quality of service to its customers and to meet the challenges and opportunities of international competition.
As has been demonstrated time and again, flexibility to meet and respond to the stimulus of competitive challenge and, indeed, the broadening of competition which follows privatisation bring valuable and tangible benefits to consumers and the businesses alike.

Mr. Nigel Spearing: A constituent of mine might tell me that the competitors to a future privatised Post Office will still be around and that the Post Office technology and innovation of the past decade will still be around, and ask what is the problem with the restrictions in the public sector. Why not let the Post Office do what it wants to, as it asked the Select Committee to be allowed to do but was refused by the Government?

Mr. Lang: It is typical of the Labour party that its members see no disadvantage in allowing a subsidised public sector corporation to compete on an unfair basis with the private sector. Of course we shall consider expanding the activities of the Post Office, but not in ways that would displace the private sector and distort competition, thus damaging the interests of consumers.

Mr. Connarty: Will the President give way?

Mr. Lang: No.
In his statement to the House last year, my right hon. Friend the Deputy Prime Minister set out a number of changes relating to the financial control regime of the Post Office which sought to balance the realities of the Post Office's continuing public sector status with the need for commercial freedoms without undermining the Government's economic and competition responsibilities.

Mr. Charles Hendry: Was my right hon. Friend as surprised as I was to hear the right hon. Member

for Derby, South talking about the Labour party's commitment not to interfere in the commercial freedom of the Post Office? Was he aware that the deputy leader of the Labour party recently visited my constituency and said that a future Labour Government would intervene and decide on the location of individual post offices, which goes far beyond the powers that Post Office Counters currently has? Does not that show that the Labour party remains committed to intervention to a degree unknown before in peace time, and would willingly tear up legally binding contracts if that suited its purposes?

Mr. Lang: My hon. Friend makes the point very well. The Labour party says one thing and does another. It claims that it would give the Post Office commercial freedom—[Interruption.] The hon. Member for Edinburgh, South (Mr. Griffiths) is getting there slowly. The Opposition say they would give it freedom to borrow in the markets, and freedom to enter new markets. In doing so, they choose to ignore the constraints of the public sector. Do they seriously believe that a public sector Post Office can be permanently ring-fenced from the constraints and pressures on public expenditure? Perhaps the Labour party could explain exactly what commercial freedoms it would give the Post Office that it does not already have?
My right hon. Friend has proposed a pragmatic and balanced package for the Post Office and the public, providing a responsible and coherent way forward which, as far as the very real constraints and financial disciplines of the public sector will allow, gives the Post Office greater flexibility and scope to extend its activities into adjacent markets.
The May 1995 statement, in recognition of the importance of maintaining a viable network of post offices, confirmed the Government's commitment to offering the services of almost 20,000 post offices to a wider range of clients. Among the new services now available or being trialled at post offices are free payment of gas bills, sale of national lottery tickets and travel insurance and bureau de change services. These and other developments in the future should help to strengthen the network of post offices, not least in rural areas where they play such an important part in the life of local communities.
The May statement also set out a number of changes to be introduced in the financial regime of the Post Office, including the external financing limit. Many of the changes have been implemented: earlier restrictions on capital expenditure have been abolished, a new corporate planning process is in place and we are open to proposals for new business from Post Office Counters and moves into adjacent market areas by Royal Mail in partnership with the private sector.
I recognise, of course, the Post Office's disappointment that it has not yet been possible to make progress towards our aim of setting the EFL at about half the forecast post-tax profits, but the statement made it absolutely clear that no responsible Government could ring-fence the Post Office entirely from the pressures on public spending. We do, however, recognise the difficulties the Post Office faces in forecasting and financial planning to achieve precisely the EFL targets that it is set. We are, therefore introducing some additional flexibility in response to its request, and we shall in future allow it to match an over-achievement, by up to £30 million, of one year's EFL with a reduction in the following year's target.
The right hon. Lady has been quick to criticise this year's EFL settlement. Perhaps she would tell us, as she was asked to do, what she would have done. If she had taken a different approach, what cuts in spending would she have made instead? Or would the money have been raised through higher taxes? In reaching its decisions on the Budget requirements last autumn, the Government were faced by the need to strike a balance between the needs of publicly financed services such as health and education and those of a public corporation such as the Post Office.
The Post Office EFLs must be seen in their proper context. The Post Office is a very successful and profitable business, but it is also a partially protected monopoly organisation, owned by the taxpayer, with an income of more than £15 million a day. In recent years, its capital investment has been running at well over £300 million a year—an historically high level and twice the rate in real terms of 15 years ago—and it should have scope to continue to invest both from its own financial resources and through private finance initiative projects. However, the Government's long-term aim is still to move towards setting the Post Office EFL at about half forecast post-tax profits.
It is worth noting that, in the last five years of Labour government, the Post Office was allowed to undertake capital expenditure of £800 million at today's prices. Under the last five years of Conservative government, the Post Office has invested £1.7 billion—more than double in real terms the figure under Labour. That is an illustration of the fraudulence of claims that increases in Post Office EFLs in recent years have starved it of capital investment.
It is for the Post Office in the first instance to present a specific proposal on the amount and timing of any tariff increase that it believes will be necessary. We shall study its proposal carefully, as will the Post Office Users National Council, which the Post Office is statutorily required to consult on tariff changes.
The Post Office has undertaken to maintain the existing level of postal charges until at least 31 March this year. By then, it will have been almost two and a half years since the last letter tariff increase. Customers are currently enjoying the longest period of stability in stamp prices since the late 1960s, but with an enormous improvement in the quality of service in recent years. The last letter tariff increase was in November 1993, and stamp prices continue to fall in real terms. At the same time, service standards remain at very high levels. Nationally, some 92 per cent. of first-class mail is delivered the next day, and over 98 per cent. of second-class mail is delivered within three days. By international standards, British letter tariffs represent very good value for money in terms of cost and quality of service.
I am aware of the concern—mentioned by the right hon. Member for Derby, South—in the direct marketing, printing, publishing and other industries that rely heavily on the mail service about the impact of an increase in letter tariffs. In the past 10 years, the volume of mail posted has increased by more than 40 per cent., with increases in each consecutive year. Recent evidence does not suggest, therefore, that a modest tariff increase has any significantly adverse effect on mail traffic—and I would point out that letter tariffs are currently lower in real terms than they were in 1979.
Today the right hon. Member for Derby, South has sought to claim that her party would give the Post Office more commercial freedom. Do she and her party support Crown conversions? If so, someone should have bothered to tell the deputy leader. On a recent visit to Glossop, the right hon. Member for Kingston upon Hull, East (Mr. Prescott) is reported in the Glossop Chronicle as saying that Labour's policy would be to stop Crown conversions—and, indeed, to reverse them in some cases. According to Labour, that is greater commercial freedom. Yet again, the Labour party says one thing and does another.
There is not even any reason to intervene; no doubt that is what appeals to Labour. According to independent surveys commissioned by the Post Office, customer satisfaction levels are higher for converted offices than for Crown offices. Recent surveys of 42 franchise offices around the country also show that customers perceive significant improvements in service over the Crown offices that they replaced. The customer is happy, the Post Office is happy, but never let it be said that Labour lets reason overcome ideology.
Of course, the reality is that Labour would never give the Post Office greater commercial freedom. Labour wants to intervene in the commercial decisions of the private sector, let alone those businesses unfortunate enough to be left stranded in the public sector should it ever win power again.

Mr. Jimmy Wray: Why has there been a 33 per cent. increase in the industry's productivity over the past 10 years? Last year it made a profit of £472 million, an increase of £306 million on the previous year's figure. Why are the Government demanding £925 million, as against the £534 million demanded in previous years? They are bankrupting the Post Office.

Mr. Lang: I welcome the improvements in efficiency made by the Post Office in recent years, which it has been able to make as a result of the benign and efficient Government who have been in charge of its affairs since 1979. However, it remains a publicly owned corporation in the public sector, which cannot be exempt from the rigours of public expenditure constraints from time to time.
The real threat to the Post Office lies in tying it indefinitely into public sector constraints and scaremongering about privatisation. The real danger lies in the policies and postures of the Labour party. At the heart of the Government's policy are the three non-negotiable commitments to which we are pledged, and which the public rightly see as essential: a universal service for letters and parcels, a uniform tariff structure and a nationwide network of post offices.
It is in everyone's interests to have an efficient and effective Post Office that can respond confidently and successfully to the many challenges it faces. We have said how we believe it should be achieved; all that the Opposition can do is whinge.

Ms Judith Church: I am sponsored by the Union of Communication Workers, which assists me in the employment of my researcher and from which I receive no personal financial gain.
It is frustrating to have to return to the subject of the maiden speech that I made 18 months ago, in an attempt to dissuade the Government from their current foolish course. Moves to reopen the Post Office privatisation issue reveal the vacuum at the heart of their policy.
Turning on the "Breakfast with Frost" programme on 7 January, I was amazed to hear the Prime Minister say— this was mentioned by my right hon. Friend the Member for Derby, South (Mrs. Beckett)—
we will look again and see whether that is a subject for the next Parliament when we come to look at the manifesto.
I can hardly believe that—after the climbdown of the former President of the Board of Trade, and the huge hole left in the Queen's Speech for this Session of Parliament, the Government are now scratching around for measures to put in their manifesto for the next election. I can hardly believe that they think for one moment that privatisation of the Post Office will be popular with the people. If the Government really believe that, and intend to put it in their manifesto—I note that the Secretary of State made no commitment in that regard—they are more out of touch with the views of the people than even I believed.
The Government's approach to the issue of Post Office privatisation has been characterised throughout by ideological dogmatism, intellectual myopia and economic incompetence. Their approach underlines their failure to heed the democratic decisions of the House and the voice of the people. They persist in a sterile argument about ownership, while ignoring the substantive issues of efficiency and competitiveness that were dealt with today by my right hon. Friend the Member for Derby, South.
The most remarkable aspect of the whole issue is the fact that the only impediment to the greater success of the Post Office is the Government. Over the past 10 years, the Post Office has contributed £1.25 billion to the Treasury; as my right hon. Friend said, over the next three years the Government intend it to contribute nearly £1 billion more. It is unbelievable that the Government should talk of profitability and enterprise in public, while doing their best to strangle one of the country's finest corporations—a public corporation with a proven track record of 19 successful years of subsidy-free profit.
The recent radical increase in the negative external financing limit not only contradicts the Government's previous statements—as my right hon. Friend pointed out—but threatens to put the Post Office in the red for the first time in 20 years. If ever there was a case of, "Do as I say, not as I do," this is it.
I suppose that we should not be surprised at the Government's continued duplicity following, as it does, the recent advice by the Deputy Prime Minister on late payment wheezes, the string of broken tax promises and the hypocrisy on crime figures. The Government have been a tragedy for Britain and they want to compound that tragedy by damaging our Post Office, which is such a vital part of this nation's life.
In rural areas, the Post Office provides a valued focus for community life. That may not mean much to the Government, oblivious as they are to the fragmentation of communities after 17 years of their policies, but Labour understands the relevance and value of cohesive communities to the nation's overall economic success.
What the Government do not seem to understand is that the nation derives a social return from the present operation of the Post Office that could not be gained from a privatised entity concerned solely with private profitability. That aspect of public service, married with efficiency, represents the cornerstone of the Post Office's success and its popular support.
Labour's alternative draws on a true belief in the ability of public enterprise to develop the vast potential of this successful British corporation. By removing the current capital expenditure limits, we shall allow the Post Office true freedom to plan for the future and invest to the optimum to meet its requirements. The Post Office will then have access to the scope and flexibility of options offered by the world's capital markets. Similarly, there must be a greater liberty from interference from the Department of Trade and Industry in proposed trading projects and a new freedom to enter joint ventures.

Mr. Bernard Jenkin: If the hon. Lady was running a private courier or parcel delivery company and found herself facing competition from a nationalised Post Office that was released from the constraints of the public sector and, therefore, able to invest capital, underwritten by the state, without risk, in businesses to undercut the hon. Lady's own business, would she regard that as fair competition, or would she go on taking advice from the right hon. Member for Derby, South (Mrs. Beckett)?

Ms Church: It is amazing that the hon. Gentleman should enunciate such a view. It is clear that he has not read the Select Committee's report or followed the arguments put forward by the Post Office about greater commercial freedom and the sort of investments that it would wish to make. I advise him to do a lot more homework on the subject.
The Post Office must be allowed to preserve its competitive edge and evolve efficiently in the rapidly globalising communications market. Otherwise, 10 years from now we could be faced with the failing corporation which, judging by the Government's actions, they seem to wish they had now.
In responding to Labour's proposals for the Post Office, the Government usually justify their approach in two ways. We have heard those arguments in part today and I am sure that we shall hear more of them later in the debate.
The first concerns the tyranny of an accounting convention and a political view that is so short-termist that it makes a goldfish seem attentive. The Government have been holding back investment in the Post Office on the ground that it would show up as an increase in the public sector borrowing requirement. Debt is, of course, a serious problem and not to be taken lightly by any Labour Member, but surely even the Government can see that investment, from which will be derived a future income stream, is qualitatively different from spending, which has no direct revenue return.
At the moment, we are in the crazy situation where all spending is regarded as bad regardless of the fact that the future income created would help to reduce debt. What is clearly needed is basic common sense, greater transparency and a more long-term approach to the Government's finances.
The other reason that the Government give for rejecting Labour's approach concerns the role of the state, to which the Secretary of State has already referred this evening. There are two related points—protecting taxpayers from private sector risk and protecting the private sector from the unfair competition of a state-backed company. Unfortunately, that view is based on the fundamentally flawed premise that a clear line can easily be drawn between state activity and private sector activity. It may well be that in the minds of the think tank-dwelling Conservatives that that is how the world works, but out in the real world which we know, things are quite different.

Mr. Jenkin: Will the hon. Lady give way?

Ms Church: No, I have already given way to the hon. Gentleman. If he listens to this point, it might help him with the issue that he raised earlier.
The state already has massive responsibilities and obligations in the private sector. For example, if one of the main clearing banks was to suffer a financial catastrophe tomorrow, would the state sit idly by while it went broke? Certainly not. The Government would have to intervene and intervene heavily, unless the Minister is prepared categorically to assert that the Government would do nothing.
What about Government bonds which finance the national debt? They are readily traded on the open market. But whose money is backing those bonds? Who else, but the taxpayer? What about black Wednesday, which all hon. Members well remember, when within hours the Government poured billions of pounds into defending a futile position? What was the ultimate source of that revenue? Once again, it was the taxpayer.
Therefore, in terms of exposing taxpayers to commercial risks, we are already widely exposed and thoroughly intertwined in the workings of the private sector. The argument is spurious. The Government do not seem to realise that, but the public have now seen enough privatisations to recognise that the private and public sectors are properly linked in a sensible way in our economy.
In that context, it is entirely right for the state to take part in profit-making activities if appropriate, as in the case of the Post Office. Given that so many of the Post Office's major competitors are also state owned or have substantial state involvement, what situation could be more appropriate? For instance, the Dutch post office has had a sales division operating in the United Kingdom since 1991. Similarly, the Canadians have allowed their post office to enter the private sector joint venture Global Delivery Express World-wide.
Overall, we have a Government bereft of ideas, trapped in the past and ill equipped to deal with the future. In place of the stagnation and confusion that distinguish the Conservative approach, clarity of vision and a more precise analysis are required. Only new Labour, with its new approach and radical agenda, can deliver that.
Greater commercial freedom would give the Post Office the opportunity that it deserves to evolve into a truly world-class corporation while retaining a clear social dimension in its operation. Under our plans, it would not be just a few fat cat executives who would benefit, but the whole nation, and that is the essential difference between new Labour and old Conservative.
The lottery of privatisations that has been delivered by the Government during their period in office is not a genuine lottery and the British people know it. We know who the winners and the losers will be. If the Government include the privatisation of the Post Office in their manifesto for the next general election, the British people will reject it overwhelmingly. I do not believe that so many turkeys on the Conservative Benches will vote for Christmas.

Sir Edward Heath: I make it clear at the beginning that I am concerned with the Government's policy, and that is what concerns my constituents, my supporters and my former supporters. They are concerned about what the Government are doing about specific problems. I am not concerned about the Opposition, because I do not want them in power. What has reduced the public's esteem of the House is the fact that the two sides spend all their time throwing mud at each other. That is not what the people want. They want a thorough examination of the Government's policy and a thorough explanation from the Government of why they are carrying the policy through and what they think the results will be.
My right hon. Friend the Secretary of State spent the first half of his speech dealing with privatisation, and accused the Opposition of dogma. The real dogma lies in believing that privatisation can be extended to everything. The country realises that that cannot be substantiated. I agree with many of the tributes that he paid to the industries and firms that have been privatised. That is good. But that does not mean that privatisation can be stretched to every activity in the community. There are many activities for which a Government should take responsibility and organise and provide finance. That is the only safeguard for the community if a Government do that.
Now we hear talk about the privatisation of prisons. I am strongly opposed to that. That is a facility in the community for which a Government must take responsibility. We have already seen some of the consequences of that particular action. It is said that the police can be privatised. I think that it is an absolute horror that it should even be mentioned as a possibility.
One must accept that, in a large sphere, privatisation has been successful, but one cannot then go on to deduce that every activity should be privatised. When I say that I am concerned about the future of the Government, it is because the people do not believe that everything can be privatised—the Post Office, for example. I am against what is proposed because my constituents are against it, and I want to be re-elected. I want a Conservative Government again. There is no doubt that my constituents are against it. The Secretary of State admitted that the people are against it. The Government should recognise and respect that. Why are people against it? Because for them the Post Office is something more than just an activity.
I do not represent an agricultural area, so I do not have the acute anxieties that hon. Members who represent agricultural areas must have, but I have a dormitory constituency in which sub-post offices are not just a service that is dished out, as people at the top think, but a way of life. It means much more to people in their


activities than just using stamps, drawing pensions and so on. I ask my right hon. Friend to recognise that. The people are against privatisation. Let our Government recognise that and accept that we have to win the next election. I am talking quite brutally about votes. I want votes. What is wrong in saying that? I know when my constituents are against a particular item and when I shall not get their support if my Government insist on going on with such items.
I can support the Government's amendment, because the last phrase is so worded that I can read into it that the Government intend to do nothing. That is satisfactory. If my right hon. Friend feels that he can come along after the next election, if he is re-elected, and say that the Government promise to think the whole thing over, well and good. We could then have another vote and another debate.

Mr. Leigh: My right hon. Friend makes a very moving appeal that we should listen to public opinion. I presume therefore that he agrees that we should listen to public opinion that tells us that 60 per cent. of people are opposed to a single European currency, so we should abide by it.

Sir Edward Heath: My constituents will support a single European currency. [Laughter.] There is no point in my hon. Friend laughing and being so arrogant as to think that he knows what my constituents will do. Of course he does not. What is more, 82 per cent. of British industry wants a single currency, and we shall get a single currency. I apologise to my hon. Friend.
Why are people so opposed to the privatisation of the Post Office, apart from the fact that it is part of their way of life? The Secretary of State said that 49 per cent. of it will not go into private hands. What do my people say about that? They say that with 49 per cent., the Government cannot control anything. Whoever gets it will do whatever they like. We have seen what has happened to 49 per cent. holdings in the past. After a period, they just disappear. Look at what happened to BP, where we always had a 51 per cent. holding, to ensure that BP did what we believed was in the national interest. Then it was reduced to 49 per cent., and then it was wiped out. People know that, and the plain fact is that they do not trust anybody who says, "If it is completely privatised, it will carry on."
Great emphasis has been placed on the 19,000 post offices, but how many will remain? I use a sub-post office, outside Cathedral close in Salisbury. My constituents use them. What undertaking is there that we shall have them? None whatever. That is why people are so strongly opposed to any complete privatisation that goes ahead in the way that has been discussed. I ask my right hon. Friend to recognise that fact. I shall certainly tell my constituents, because I get many letters on the subject, that I am absolutely opposed to privatisation. They know that already, and I shall do my utmost to stop it. We have too many privatisations at the moment, and they are all on the basis of the same dogma. People want to keep the Royal Mail.
Many people think that one can just sell off the royal yacht because it does not matter. They are completely wrong. People say that if we are to have a monarchy,

it must be treated appropriately. The royal yacht has stood this country in good stead, with royal visits all over the world. Why throw it away?
Look at Greenwich, which is one of our great glories. The Government say, "Away with it." The Secretary of State for National Heritage sent me an advertisement to take Greenwich, if I wanted to, on a 100-year lease or whatever. The advertisement was of the most vulgar kind, to which the lowest estate agent would not put his name. Why must that happen?
We now read that the royal train will be run by an American company. I am not opposed to American railways, but I believe that our royal train should be run by this country whether it is private or nationalised. People feel that things which are in our own interest and which are of historical importance, such as Greenwich, the royal yacht, the royal train and other items, should not be thrown away in the haphazard way that they currently are.
I hope that my right hon. Friend can influence the Government, so that we British can be proud of the things that are our heritage. That is completely different from spending our time attacking our allies and neighbours for what, allegedly, they are doing, because that is xenophobic, but we can rightly take a pride in the things that are of great historic importance. If we do that, the people will begin to trust us much more and will support us more in the other difficult things that from time to time we have to do.
I shall read the last phrase of the Government's amendment to my own satisfaction—if not that of my right hon. Friend—so that it means that the Government will do nothing beyond what has already been done. My constituents can rest assured that they will have the way of life that they are used to and I shall know that I can continue to use my little place outside Cathedral close. What is more, my constituents may then return their support to us as a party and a Government. I am not ashamed to say that that is what I want and that it is what we have to work for. I wish that the Government would take the same view.

Mr. Nick Harvey: This is a welcome opportunity to discuss in the House the future of the Post Office, because in his television interview the Prime Minister chose once again to throw into uncertainty the whole issue of the future of the Post Office. There is no doubt that the people of this country feel strongly about it. It is a pleasure to follow the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), because he made two valid points. His account of where public opinion lies on the issue was entirely right. There can be no doubt about that whatever. His second point, that there had been successful privatisations in some industries but that that does not prove that one would enjoy success by privatising every part of public service, is also right.
By suggesting yet again that the Post Office is a suitable candidate for privatisation, the real risk exists of undermining what is undoubtedly a genuine British success story. The Post Office needs to be able to compete in an increasingly competitive market, but it is being hampered from doing that by the uncertainty caused by the Prime Minister's latest outpouring.
The same thing has happened to the railways industry, where the Government took far too long to decide what they wanted to do. As a result of an appalling hiatus that


lasted several years, the country's train-building industry has collapsed. If we have a rail renaissance, we shall have to go to France and Sweden to buy our trains. The Government are creating in the Post Office the same degree of uncertainty that affected the railway industry, and they are inflicting the same damage.
When I hear the Secretary of State for Trade and Industry yet again tell the House that it remains the Government's policy and preference to privatise the Post Office, but that they are not doing so because there is inadequate parliamentary support for it, I am forced to conclude that the Government are in office but not in power. If they are unable get such a policy through the House, they should think again and come up with another policy.
Some time ago, in their Green Paper, the Government proposed three alternatives: to privatise, to give commercial freedom within the public sector, or to split the business up. If they are unable to press ahead with privatisation—and I hope that they have rejected the option of splitting up the business—they should try to give some meaning to the commercial freedom option. I thought that some modest progress was being made in that regard. When the former President of the Board of Trade told the Select Committee on Trade and Industry that there would be an attempt to keep the negative external financing limit at about half the projected pre-tax profit, that seemed to give the Post Office at least some basis on which to plan its business. There has, however, been the most appalling reneging on that commitment.
Let us be clear about privatisation's principal problems. The Post Office has already been split into three operating businesses: Post Office Counters, the Royal Mail and Parcelforce. If the Royal Mail, by far the most profitable of those three parts, is to be privatised, there are two obvious consequences. First, the cross-subsidisation option, which is not currently being used, would go indefinitely. I represent a constituency with many small rural sub-post offices. I talk to the people who run them and respect their role in small village communities—a far broader role than simply running a business. Such businesses are a focal point for the community.
I talk to the people who are struggling to run those small businesses. They are inadequately rewarded and remunerated for the service that they provide. The salaries, if one dares to use that word to describe the payments that they receive from the Post Office, are pathetic and insulting. When the Government take away those vast sums of money, which could sensibly have been used to ensure that small rural post offices were more viable, we will think that whole world has gone completely mad.
If the Royal Mail is to be taken out of the equation and its profit may no longer be used for cross-subsidisation, only one sensible conclusion can be drawn: the future of the rural sub-post office network is in doubt and in danger. That is the first principal objection. If the Royal Mail were taken out of the equation, the option of using the considerable revenues that it earns to improve and to build for the future of the rural sub-post office network— and of urban post offices, which also play an important role—would be gone.
Secondly, let us consider what a privatised Royal Mail would be like and what it would choose to do. In representing my constituents, I look to the example of

what has happened in the gas, electricity and water industries, to name but three. In all cases, new private operators are, sensibly and properly, beginning to develop cost and charging bases that reflect the true economic cost of doing things. That is a fact. I represent a rural constituency. Providing services in scattered rural areas is much more expensive than providing them in densely populated, urban areas. If the costs of all public services are to start reflecting that, the rural way of life will be undermined.
If the privatised Royal Mail is to continue to be under a Government obligation or regulation saying that it must be willing to deliver a letter from Penzance to the northern reaches of Scotland for the same price as it will deliver a letter from one London street to the next, what on earth is the point of privatising the Royal Mail? What great philosophical leap forward will be achieved if they tell Royal Mail what to charge, to whom to charge it and what the conditions of service will be? If we really cast the Royal Mail free and allow it to do what it pleases, my constituents will suffer. If we do not, but leave it heavily regulated and tell it exactly how to run its business, what to charge and how to do it, what is the point of privatising it?
If we allow the Royal Mail to go its own way and the competitors that we hear about start cherry-picking— to quote an expression that has been used in debates on privatisation—the more profitable business in the towns, then the viability of the business that is left will be reduced as a consequence. Perhaps the Government intend to offer certain routes, accompanied by certain amounts of subsidy. After all, that is the way in which they have chosen to approach rail privatisation. It seems that anything is possible in the ideological quest to privatise.
The Secretary of State properly made the point that Post Office Counters is largely in private hands already. In the past seven years, more than half of directly operated main post offices have been turned into franchises. In addition, about 20,000 sub-post offices are private businesses. As I have described, many of them struggle against considerable odds just to keep going and to provide the useful and broad service that I have spoken about.
The Prime Minister should be aware that his Back Benchers representing rural areas—certainly those representing Devon and Cornwall constituencies—are acutely aware of that as well. That is why some of them have been unwilling to support the ridiculous suggestion that the Royal Mail should be privatised. They understand only too clearly the damage that they will do in their constituencies and, as the right hon. Member for Old Bexley and Sidcup rightly said, to their vote on polling day.
That is not to say that the Post Office should be left exactly as it is. As we have been told, competition at home and abroad is growing. To counteract that, to respond to it effectively and to try and beat the competition, the Post Office needs commercial freedom and access to capital to make decisions and to get on with competing. We want the Post Office to develop into new sectors of business. It would make sense to allow it to join the private sector in joint ventures. That would improve the quality of service that customers receive and ensure that costs are kept low. It could help to turn a national success story into an international success story.
I understand the fact that Conservative Members, in some cases, would prefer, for ideological reasons, to go down the privatisation route. They are entitled to that


view, but when they say to Opposition Members that it is impossible to grant commercial freedom in the public sector, they are simply wrong. Examples exist in other industries in this country and abroad of post offices and many other enterprises proceeding on that basis. It may not be Conservative Members' preferred choice. I accept and respect that, but it is wrong and phoney to say that it cannot be done. It is done successfully in other industries and in other countries.
It is imperative that we ease the financial constraints that have been imposed. It is outrageous for the Government to seek to purloin such revenue from the Post Office. It has made great strides forward and achieved great things in terms of its productivity yet, since 1981, it has contributed £1.250 million to Government coffers. Now the Exchequer is looking for the best part of another £1 billion in the next three years.
As has already been said, if we add together the negative financing limit and the corporation tax that will have to be paid, the sums that the Government are looking for are greater than the current profit.

Ms Church: Extortion.

Mr. Harvey: By any reckoning, that is totally ludicrous.
What sort of business anywhere, in any sector, in any country can expect the Government to take away from it at the end of a highly successful trading period a sum greater than the profit that it has made? That is utterly nonsensical, the desperate move of a Chancellor of the Exchequer who is in a tight financial corner and has decided to turn on the Post Office and raid its coffers.

Mr. Jenkin: Of course the money that the Government plan to raise from the Post Office will be incorporated into their financial plan. Can we take it that the Liberal Democrats, who are famous for wanting to increase income tax, will apply that increase not to education, as they promised, but to replacing the revenue lost from the Post Office?

Ms Church: Is that a tax?

Mr. Harvey: The hon. Gentleman should recognise that that is indeed, as the hon. Member for Dagenham (Ms Church) says, a tax. The Government are imposing on the Post Office such huge costs that it will have to levy more costs on the taxpayer, in the form of more expensive postage stamps. The whole gamut of its business will be there, and it will have to charge more. The hon. Gentleman's point—

Mr. Anthony Coombs: rose—

Mr. Harvey: I am still replying to the hon. Member for Colchester, North (Mr. Jenkin). If his argument is that we are trying to save the taxpayer from a great burden, he must realise that there are alternative ways in which to do that.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): If the money is, as the hon. Gentleman says, a tax, with what would his party replace that funding?

Mr. Harvey: One draws up a budget for the entire year, and the Government have chosen to draw it up on that

basis. Most of the money will constitute a tax that falls on business, but the other element, which falls on individuals, could hardly be less progressive. One could hardly turn one's mind to any form of taxation that could be deemed more unfair, or to penalise vulnerable people more. I can think of any number of ways in which a Government might chose to increase revenue, almost any of which would be preferable to the one that the Government have chosen.
On commercial freedom, how can the Government justify—

Mr. Jenkin: Will the hon. Gentleman give way?

Mr. Harvey: I have already given way to the hon. Gentleman.
How can the Government agree to the BBC's participating in just such joint ventures—in the past they have also allowed various parts of the nuclear industry to do so—yet for some reason find it total anathema to consider allowing the Post Office to do the same? Moreover, there is one crucial difference between the BBC and the Post Office—the Post Office is turning in a huge profit, which the Government are raiding for the sake of easing their predicament over the public sector borrowing requirement.
The threat of Post Office privatisation is real. The word "threat" is appropriate because by taking the profitable business away and so preventing cross-subsidy, the Government will put the rural sub-post office network under threat, and by allowing private operators to drive a coach and horses through the principles that have guided our Royal Mail network ever since its inception, they will threaten the universal mail coverage service.
Changes must be made to the way in which the Post Office operates, but the way forward must be through greater commercial freedom within the public sector, not through privatisation. Splitting and privatising the different parts of the network would be unprecedented. Any such move would be to the detriment of customers, and the sooner the Prime Minister abandons that foolish idea, the better for the Post Office and its customers.

Mr. Edward Leigh: May I comment briefly on the speech by the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) before he leaves the Chamber? He made a most interesting point, with which I agree—that the public are concerned, and probably oppose Post Office privatisation. There is no doubt about that.
However, the right hon. Gentleman recognises that many of our privatisations have been successful over the years, although the public opposed every one of them beforehand, and while they were going through. The public are naturally concerned about change. However, the fact that the public are concerned does not mean that we should immobilise our policy. We have to consider the economic reality.
This is an example of an issue in which political sentiment flies in the face of commercial reality. The Post Office is a commercial organisation. We simply cannot give it the commercial freedom that it needs if we retain it in the public sector. The right hon. Member for Derby,


South (Mrs. Beckett) asked me a fair question—whether I approved of the Government's using the Post Office as a milch cow. I am not a Member of the Government, so I have a certain freedom in what I can say in the Chamber. I do not approve of the Government's doing that, but I do not believe that we could expect better from any other Government. We certainly did not expect better from Labour Governments in the past, nor could we do so in the future.

Ms Church: Will the hon. Gentleman give way?

Mr. Leigh: I shall give way later, but first I want to develop my argument.
One of the most interesting features of the debate was that when I asked the simple question whether the right hon. Lady would limit the external financing limit to halve the profits of the Post Office, she could not answer. Of course she could not. We well know that a Labour Government, like any other Government, will be strapped for cash, and will use the Post Office as a milch cow so long as it remains in the public sector.
I am sorry to say that the speech by the Liberal spokesman, the hon. Member for North Devon (Mr. Harvey), was utterly illogical. Would he really increase income tax to cut the price of a stamp? That seemed to be what he was suggesting.

Mr. Harvey: May I ask the hon. Gentleman exactly the same question? He has told us that he does not approve of the Government's using the Post Office as a milch cow. Can I ask him what the hon. Member for Colchester, North (Mr. Jenkin) asked me? How would he replace the revenue? Is he not arguing against his own case?

Mr. Leigh: I am delighted, because the hon. Gentleman has led with his chin and made precisely the point that I was about to make. I would privatise the Post Office. We should not be running it. That is the simple answer; that is the commercial reality. It is nonsense to suggest that what the hon. Gentleman says can apply to a successful commercial organisation. The Post Office is becoming more and more commercial. Even its brochures say things such as:
European postal administrations are now able to operate much more commercially and are making the most of their new status. Success in the future will go to those communications companies who can operate globally".
The whole tenor of that is not that the Post Office is a public service, but that it is a highly commercial company operating in the real business world.
The Post Office makes huge profits because it has a monopoly. It delivers the 67 million letters every working day that its propaganda tells us about—and good luck to it.

Ms Church: rose—

Mr. Leigh: I shall give way to the hon. Lady in a moment, but I want to answer the question first.
The Post Office is a commercial organisation, and it will make huge profits because it is a monopoly. It can hardly fail to do so. So long as it makes profits the Government, rightly, will view it as an alternative means of taxation. That is the real world in which we live, and there is no point in denying it.
My hon. Friend the Member for Colchester, North made a good point about that. I have received a communication from DHL (UK) International Ltd., a successful private company that deals with parcels. Talking about VAT, the document rightly says:
Many of the premium services currently offered by the Post Office are in direct competition with the express distribution industry and yet are still classed as VAT exempt, while DHL has to charge VAT. Consequently, DHL is prejudiced in its ability to compete on price with the Post Office".
One could mention 101 other examples, if one wanted to. My hon. Friend and others asked the question strongly: is it fair for a company wholly owned by the public sector and entirely buttressed by it, with a monopoly, to compete unfairly with the private sector because it has full commercial freedom and can do whatever it likes?

Ms Church: Perhaps the hon. Gentleman would like to inform us what proportion of DHL's profits are paid into the public purse, in contrast to the percentage of Post Office profits that are currently bailing out the Treasury from its economic mess.

Mr. Leigh: I am sorry, but that is not the point that I was making. DHL pays corporation tax, like any other business. If we privatised the Post Office it would pay corporation tax. It would be a highly successful company and would yield at least £2 billion or £3 billion on privatisation, which could be used to build hospitals or whatever we liked. It would be able to operate globally in the world marketplace, pay its corporation tax and do all that it could possibly want. But it would not be competing unfairly with the private sector—nor would it be held back.
Those of us who try to run the Post Office in the public sector, as I have done, and as my hon. Friend the Under-Secretary of State for Trade and Industry is now doing, have found that one of the main problems involved is that the postmasters, about whom we have heard so much, keep coming to us and saying, "We can't compete. Give us more power."
The Treasury is right to say to Department of Trade and Industry officials that the Post Office cannot be given more powers because it is in the public sector and unfair competition would result. I understand the Treasury's arguments. We are therefore considering a decline in business. As long as the Post Office is kept in the public sector, regardless of who is in control in this House, the Treasury will prevent sub-post offices and post offices from competing unfairly with the private sector. That is the economic reality that we face.
The only way to solve the problem is to push the Post Office out into the private sector and allow it to deliver the kind of service that it wants. The Royal Mail would be allowed to become a modern communications company, break into the new electronic age and compete on a level playing field with other companies. Post Office Counters would be able to compete, and build itself up by establishing local financial centres in towns and villages where it could deliver the services that it liked. As long as the Post Office is shackled to the public sector it will be used as a milch cow and will not grow.
We face a political problem, as my right hon. Friend the Member for Old Bexley and Sidcup rightly underlined. [Laughter.] There is no point in Opposition Members


laughing. There is a political problem; people are worried about change. As we well know, there is no overwhelming public demand for the Post Office to be privatised, any more than there was for any industry to be privatised. The Government must therefore think of ways in which to achieve Post Office privatisation.
One of the ways in which the Post Office could be privatised—I do not know why the Government have not done it during the past couple of years—is to make it a public limited company before the general election, selling, say, 15 per cent. of the shares to the work force, 15 per cent. to the general public, 15 per cent. to city institutions and retaining about 55 per cent. in Government control.
I have no doubt that such a measure could have got through Parliament. Although some Conservative Members are—apparently—opposed to Post Office privatisation, I would have thought that every sensible person would allow it to become a public limited company despite the fact that there is not a majority in the House in favour of it becoming a plc and 51 per cent. of it being owned by the private sector. We could have at least moved down that road. That would have been a sensible halfway step. In our next manifesto we should promise that we will sell 51 per cent. of the shares.
When the right hon. Member for St. Albans (Mr. Lilley) was Secretary of State for Trade and Industry, I tried to persuade him to put the proposal in our previous manifesto, but it was early days and I did not succeed. If there had been a line in our previous manifesto stating that we were to privatise the Post Office, I doubt that it would have lost us a single vote. I do not think that when the public vote—whether they vote Conservative or Labour—they are really concerned about items in a manifesto that state that the Government are or are not planning to privatise the Post Office, as long as the policy is explained. We could have done it, we should have done it and we will have to do it in the end because we certainly cannot leave things as they are for the reasons that I have given.
Whatever the hon. Member for North Devon says, the Post Office is very different from the BBC. There is no point in comparing them and saying that the BBC is owned in the public sector but has full commercial freedom. It is a completely different organisation. The Post Office is a modern, commercial company. There is nothing very romantic about delivering pieces of paper around the country. The overwhelming volume of that paper comprises not letters from old grannies to their nephews, but correspondence from business to business and business to people. It is virtually an entirely straight commercial operation. Apart from political sensitivity, there is absolutely no reason why that business should not be privatised tomorrow.
Plans to privatise the Post Office should be put in our manifesto and carried out. Indeed, I predict that we will put it in our manifesto, that privatisation will be carried out sooner or later, and that it will produce an exciting new future for the company. The Post Office will become one of the great British success stories. It will carve out markets all over the world. I also predict that across the countryside, successful local post offices will deliver financial services and have an assured future. It should happen, and it will.

Mr. Michael Connarty: I should like to put on record that I am sponsored by the Communication Workers Union. Its money—the amount is in the Register of Members' Interests and has been since the day I was sponsored—goes to run services in my constituency party and does not come to me in any way or form. I make no financial gain from it.
It is interesting that the hon. Member for Colchester, North (Mr. Jenkin) is registered as being a political adviser to an insurance company. There is a slight difference between being a political advisor to an insurance company that is directly commercial and being a Member of Parliament whose constituency party is sponsored by a trade union. Hopefully, Conservative Members will one day realise that and that we are not bought and sold by the money that a trade union gives us. I would say everything that I am about to say regardless of whether I was sponsored by any trade union.
I shall not follow the high level of analysis of my right hon. Friend the Member for Derby, South (Mrs. Beckett) or the high finances adequately covered by my hon. Friend the Member for Dagenham (Ms Church). I was surprised at the approach of the President of the Board of Trade. The Prime Minister put his foot in his mouth during the interview with David Frost and tripped up his hon. Friends by letting slip some little secret idea to win over the right wing of his party and thereby keep himself in office. Perhaps it was a thank you for what happened in the 1922 Committee a week or so ago. I do not think that the idea had been thought through. It was quite clear that the Secretary of State, whom I have known for a long time through his work as Secretary of State for Scotland, was not up to his brief. He made several substantial errors.
The President of the Board of Trade said that Post Office privatisation was being considered, as the Prime Minister had said. That is as far as it goes. The President of the Board of trade revealed in response to an intervention from the hon. Member for Hampshire, North-West (Sir D. Mitchell) that he, personally, was a privatiser. That was interesting: he put himself on the line. Perhaps he, too, is looking for right-wing support. If he is a privatiser, he had better not go looking for the support of people in Galloway, because he will be out on his ear— and any Member representing a Scottish constituency who tries to support Post Office privatisation will join him.
In reply to another intervention, the President of the Board of Trade said that the Post Office was a subsidised industry. My hon. Friend the Member for Dagenham pointed out that for the past 19 years the Post Office has not only been a subsidy-free service to the public—it has been much more. I should like to put a simple lesson in economics on the record so that the right hon. Gentleman can read it later. If a private company borrows money, invests it, makes a profit and pay backs the money that it has borrowed, it is not subsidised. That is called making a profit.
Of course the President of the Board of Trade is not supposed to know about such things because he is not the Chancellor of the Exchequer, who is at last beginning to make salutary comments about his party's policies in the run-up to the 1992 election and how they are costing him a great deal of money and preventing him from balancing his Budget. I believe he said that the blame for £28 billion of public sector borrowing requirement lay clearly at the feet of the Prime Minister.
The previous President of the Board of Trade, the Deputy Prime Minister, is responsible for all the comments that have been quoted. He said in response to the Select Committee report that the Government would try to reduce the Post Office public sector take to 50 per cent, through its external financing limit. Now the Government are talking about reducing the take by £925 million over the next three years, which is almost 66 per cent. of profits. The Post Office has said that that leaves it nothing for investment and for all the initiatives that the Government tell us they will allow it to introduce.
The bottom line, which everybody will realise from what has been said tonight, is that postal charges are going up to pay for the Government's failures. As the President of the Board of Trade said, the Post Office cannot escape the difficulties of public sector finances. The Post Office does not have a problem with public sector finances. It is the Government who have a problem with public sector finances, and their failures will now be paid for by everyone who licks a stamp and sticks it on a letter.

Mr. Jenkin: rose—

Mr. Connarty: I give way to the hon. Member for Legal and General.

Mr. Jenkin: The hon. Gentleman should look at the history of privatisation. If he does, he will see that prices have tended to fall after privatisation. The only reason why stamp prices are having to rise is that the Post Office remains in the private-public sector. If we privatised it, it would increase its efficiency, profitability and competitiveness, and there is no doubt that it would cut prices. Indeed, because of its monopoly position, there is no doubt that the Government would want to privatise the Post Office with a K-minus formula to ensure that it did cut prices.

Mr. Connarty: I shall return to the economics of delivering post, which is very important. I hope that Conservative Members will listen because the comments will not be mine, but those of Professor Baumol. He spoke about what he called handicraft industries, or those delivered by a human being at the point of consumption. These include the delivery of letters, and also the health service and education. The quality of the service is important, and not just the speed or cheapness of the service.
I am always amazed to hear Tory Members talk about privatisations as if they were universally successful. They may be successful for the person who gets shares, and particularly successful for those fat cat executives who receive shares at their original price and then take them up later under their share option schemes. We have been disgusted, as I hope the Tories have been—although it may be just jealousy from Tory Members—at the profit rake-offs by the so-called inadequate former executives of public sector industries. Suddenly, these people have become super-whizzkids and are worth a £1 million backhander.
The person who was in charge of the Post Office has run off to the private sector because the executive jets and money that he thought he would get following the privatisation that he was pushing for with the former President of the Board of Trade did not come off. He has had to go and earn his crust somewhere else.
I do not think that all privatisations have been successful. Hon Members should look at the shambles of British Gas. It is all very well for the Tories to talk about prices, but we should look at the structure of the business. A loss of £1.5 billion is pending, and the domestic side of the company has been split off into a company called BG Energy, with £2.6 billion assets. Meanwhile, TransCo and all the profitable overseas sectors have been hived off. The consumer will pay for those losses.
In every case in the water industry, the consumer— because of the monopoly—will end up paying in the long run. Investment has not gone into the water industry, and someone will have to pay for it. That someone will be the consumer. We will have to look at industries in the longer term before we can say that privatisation has been universally successful.
Let us look at the past attempts to privatise. The hon. Member for Gainsborough (Mr. Leigh) talked of a fantasy world where not a single vote would have been lost had the Tories privatised the Post Office before the election. I do not know what world the hon. Gentleman is living in. There were 16,000 submissions received against the proposal, while only 60 were in favour. Lo and behold, the majority of those 60 were speculators, bankers and investment companies who could sniff the profits that they could make from another rip-off of a public sector service. That is the reality.

Mr. Leigh: Did the Conservative party lose the 1983, 1987 and 1992 elections after we had privatised 57 industries?

Mr. Connarty: It is a pity that the hon. Gentleman, who sat so close to the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), did not listen to what the Father of the House said. He said that his constituents did not want the Post Office to be privatised, and that is the reality in most constituencies around the country. The hon. Gentleman shows an absolute contempt—which unfortunately runs through his Back-Bench colleagues— for the people who put him here.
If Conservative Members do not listen, they do not deserve to be here. If the hon. Gentleman thinks that the Government can get away with sticking people's noses in it, he deserves to go, as does every hon. Member who agrees with him. One day, people will not vote on the basis of slavish adherence to their party, and hon. Members will lose their seats on the basis of their contempt for people's wishes. That democratic deficit will be righted at the next general election. That is why 55 Tory Members are running for cover, including Front-Bench Members such as the Minister for Energy who has tried to explain the gas fiasco. They are running away because they know that the people are coming to get rid of them.
Let us look at some of the remarks made in previous debates on the privatisation, one of which was repeated tonight by the President of the Board of Trade. He said that this wonderful Government would not harm the sub-post offices network, which would not be challenged in the private sector. But let us look at the agenda that is beneath that comment, which was raised at the time and continues to be pushed.
The Government want to save money by the use of electronic transfer payments from the social security budget, and the way in which they intend to save money


is very simple. One does not receive as much for a transfer payment by electronic means as one does for payments made over the counter, as they are at present. Something like 50 per cent. of the income of most sub-post offices comes from Government transfer payments for social security. Even with that income, there was embarrassment in the Prime Minister's constituency when the local post office had to shut down right in the middle of the last privatisation débâcle because it could not make ends meet. There were not enough people getting transfer payments through that post office.
If the Government increase the use of electronic transfer, they will cut the incomes of sub-post offices to such a level that sub-post offices throughout this country may have to close. These sub-post offices are marginal economic institutions at the moment. Alternatively, the sub-post offices will have to put up the prices of basic food and goods that people in small villages and communities need. Those sub-post offices are not just in villages and communities, however, but in the housing schemes of Paisley, Glasgow and the larger towns of Britain.

Mr. Gordon McMaster: My hon. Friend is absolutely correct about the effect of privatisation on sub-post offices and about the role that they play in the community. Does he agree that those sub-post offices are the only contact for many elderly and disabled people with the wider community, and nowhere more so than the constituency of the President of the Board of Trade—Galloway and Upper Nithsdale, which is a collection of small villages?

Mr. Connarty: That point is very well made. The public will certainly be coming for the President of the Board of Trade, not to wish him well in his defence of privatisation, but to wish him out of their lives. They will bring in someone else who represents their views. It is interesting that this is another example of Conservatives saying one thing and doing another. What the previous President of the Board of Trade said about privatisation rings as false as when he used to tell his creditors that the cheque was in the post.
Reference was also made to previous debates about Crown office closures. Crown post offices are very important to people in towns, and it is not just a question of their symbolism as large buildings. For many people, the Crown office is the most convenient place to do their business. There is no doubt that the number of campaigns against the closure of Crown offices up and down the country were not spurred on by counter staff or by the CWU membership. I have been in cities—some of which are represented by Conservative Members—where petitions of 12,000 people were collected to try to stop the closure of a Crown post office because those people saw it as the most convenient place to do their business.

Mr. Thomas McAvoy: On the subject of Crown post offices, is my hon. Friend aware of the proposal made by Post Office Counters Ltd. to close Cambuslang Crown post office and make it into an agency post office, despite community protests? That Crown post office operates from premises leased to it by Lanarkshire county council for 999 years as long as it is used for

community purposes. Post Office Counters intends to sell that building for £250,000. That is an example of the drive to turn money over to the Government through this semi-privatisation. The money will go straight into the Government's pocket.

Mr. Connarty: The point is well made. That example in Cambuslang is repeated throughout the length of breadth of Britain. It is interesting to consider the numbers. There were 1,500 Crown offices in 1989 and there are now only 700.
It is not just Labour Members who oppose the closure of Crown offices. The right hon. Member for City of London and Westminster, South (Mr. Brooke) and the hon. Member for Basildon (Mr. Amess), no less, oppose the closure of Crown post offices in their constituencies. The hon. Member for Basildon is the original Essex man. One would probably call him the temporary Member for Basildon because, like many others, he is on his way out. The hon. Member for Saffron Walden (Sir A. Haselhurst) also opposes the closure of Crown post offices.
There has been a report about what happens when Crown post offices are lost and replaced with franchise offices. The latest document which has been leaked to Members of Parliament shows that franchise offices make four times as many errors as Crown offices. I have a simple piece of advice for my Front-Bench team. I do not make policy, but I am not afraid to give advice. We should commit ourselves to cease Crown office closures immediately we come to office, before we do anything else, and then conduct a nationwide review of the network of post offices. I believe that we would find serious deficiencies.
Some post offices have gone into the backs of shops. Conservative Members do not seem to be concerned about people who have a marginal income going to collect it by transfer payment at the back of a supermarket, perhaps with a couple of kids, and then coming out and buying things that they did not intend to buy, are not in the family budget and they do not and cannot normally afford. That is the pattern that is beginning to emerge. People are not spending in a planned way because many other things are demanded of them. Conservative Members should take heed of that.
We are not talking just about whether something makes sense commercially and whether people make a profit. We are talking about whether it makes sense socially. Does it make sense for the type of fabric of society, not just the type of commercial enterprise that we want to see? That is the difference between Conservative Members and Labour Members. We believe that we should be concerned about the social results of the things that we do, not just the results in terms of profit and share price. We care for the many. They care for the few, and everyone knows it. [Interruption.] Does the hon. Member for Wyre Forest (Mr. Coombs) wish to intervene?

Mr. Anthony Coombs: I will allow the hon. Gentleman to finish.

Mr. Connarty: I can assure the hon. Gentleman that I will be on my feet for a few minutes yet.
Stamp charges are likely to rise. The increase in postage will damage some of the commercial interests that Conservative Members wish to see developed for post


offices. We are told that the post offices are successful and have operated for 19 years without subsidy. We have been told about all their achievements.
The Mail Order Traders Association, the Direct Marketing Association, the Mail Users Association and the Periodical Publishers Association have taken out an advert in The House Magazine. I hope that Conservative Members will take the trouble to read it. In case they do not, I will read some of it into Hansard for their benefit. It says:
Direct mail alone generates £13 billion worth of business: Substantial economic decline"—
if postal stamp charges rise. It says that
Over 50,000 jobs depend on the Mailing Industry: 15 per cent. to 20 per cent. of jobs could go"—
if postal stamp charges rise. It says that
Most advertisers plan to increase print budgets: Substantial switch to electronic media"—
to save on stamp charges, if they rise. It says that there has been a
60 per cent. growth in Direct Mail over 5 years: Lost opportunity for an expanding industry"—
if postal stamp charges rise. It refers to
Financial Mail, the largest single sector: Severely damaged"—
if postal stamp charges rise—and a
30 per cent. growth in magazine subscriptions over 5 years".
The President of the Board of Trade tells us that, despite the increase in charges, everything has grown, but the associations say that they are likely to become unprofitable if they have to pay the extra stamp charges on mail. The advert says simply, "Say no to postage price increases." That advert was paid for by the mail users associations.
Let Conservative Members listen to someone if they will not listen to us.
Another thing that is happening in Royal Mail is that delivery time agreements are being eroded. The Department of Trade and Industry has been behind encouraging that, just as it was behind setting targets for the closure of Crown post offices—as was revealed by a leaked memo during the last campaign.
The standard is supposed to be that all first-class mail is delivered by 9.30 am. The pressure is on to earn the money that will be taken away in the external financing limit by pushing postmen out with more and more mail in their sack. That will mean that people will sometimes not receive their first delivery of mail until 11 am, with a peripheral delivery of the last bits of mail after that time.
In London, there is an agreement that 60 per cent. of the mail goes out in the first delivery and 40 per cent. goes out in the second. In Scotland recently there was an industrial dispute caused by the actions of the management in trying to impose new rotas, under which 90 or 80 per cent. of the mail went out in the first delivery. We find people making deliveries at 11 o'clock. When we ask whether it is their first or second delivery, they say that it is their first delivery. It is the first delivery. The Government have a responsibility, before they talk about privatisation, to make sure that consumers get the standard of service that they thought that the Government were guaranteeing them through regulation.
Finally, I come to Professor Baumol's analysis of handicraft industries. I was an economics student when he was considered to be extremely right wing in the

economic world. He recently gave a lecture on the health service but referred to other industries that come into the same category—industries delivered by the hand of a human being at the point of consumption. He named mail delivery as one of those and said that, as with health, we cannot get productivity by cutting the number of bodies doing the job. That leads to a loss of quality, not better productivity. There is a difference. The Government's pressure will bring about a loss of quality. It has already been said by the new chief executive of the Post Office that the stupid remark of the Prime Minister—I do not think that the Prime Minister had thought about it before opening his mouth, and forgot to put his brain in gear— has caused a great deal of concern in the industry and problems for its investment in the future.
I do not disparage the image suggested by the Prime Minister of a Britain with warm beer and cricket on the lawn. I prefer a good, cold pint of lager and a game of rugby, as do most Scots—especially when we play England, as we will in a few weeks' time. I predict that another victory is on the way.
The Government and Conservative Members should not diminish what is left of their reputation. They should back off and not put this in their manifesto. I say that for their sake and for the sake of the people, who want a public sector Post Office with commercial freedom, not a privatised Post Office fighting in the market and sacrificing its customers for the sake of its boardroom.

Mr. Douglas French: The motion invites the House to accept that privatisation would threaten the continued success of the Post Office and place individual post offices in jeopardy. It is not a very full-hearted endorsement of the Opposition's argument for commercial freedom that they make no mention of it in their motion.
To be fair to the right hon. Member for Derby, South (Mrs. Beckett) and the hon. Member for Dagenham (Ms Church), they did argue in favour of some measure of commercial freedom and were joined by the hon. Member for North Devon (Mr. Harvey). One assumes, from what he said among the political invective, that the hon. Member for Falkirk, East (Mr. Connarty) also believes in a measure of commercial freedom. None of those hon. Members gave a coherent presentation of how we could achieve commercial freedom in the public sector, which, after all, is at the heart of this debate.
The problem is that the Labour party is ideologically opposed to any proposals that are labelled as privatisation. The hon. Member for Dagenham accused us of it, but it is her party that is being ideologically dogmatic by not recognising that the Post Office needs commercial freedom and that the only way to deliver it is privatisation.
It is interesting to note that senior management of the Post Office have consistently argued for privatisation. Bill Cockburn was an articulate proponent of it. It is much to the loss of the Post Office that he tired of waiting for something to happen. He wanted privatisation, but, sadly, he has gone to W. H. Smith—to its gain and to the loss of the Post Office. Michael Heron continues to argue in favour of privatisation.
Sadly, the Labour party takes the view that what senior management want cannot also be in the best interests of the Post Office's work force. That was clear from the


sneering comments of the right hon. Member for Derby, South and the way in which she referred to City institutions and from the reference of the hon. Member for Falkirk, East to fat cats. Those are typical left-wing arguments—what is good for management will automatically be bad for those who work for the business. Rather, it could more appropriately be argued that management is best placed to know what is likely to benefit the business.
The first thing that the management of the Post Office has always recognised is that Royal Mail is at the heart of the business and that success must be achieved in that sector. In relative terms, it is more important than any other part of the business. If the fortunes of Royal Mail go down, so, too, will those of Post Office Counters.
Royal Mail has been, historically, a labour-intensive organisation, but is becoming less so because of technology, especially automatic sorting equipment, which becomes more advanced almost every day. It represents a huge investment by the Post Office to keep up to date with technological advances.
Technology means that a given volume of mail can be handled by a smaller work force. We have heard from two hon. Members who are sponsored by unions with an interest in the Post Office, and I appreciate that the unions are concerned that the use of new technology could result in lost jobs. That is the gut reaction when one tries to gauge what might happen. My local sorting office on Eastern avenue, Gloucester provides several hundred jobs, and I must consider what is in the best interests of safeguarding them. To ignore the arguments about the advantages of privatisation is the very way to place those jobs in jeopardy.
That privatisation would ultimately mean job losses is the thrust of the message from the Labour party to the unions or, given the wording in the Opposition motion, perhaps it is the thrust of the message from the unions to the Labour party. The reverse is almost certainly closer to the truth. It is not possible now to stop new technology, and no one would want to stop new investment in plant. It is possible, however, to take steps to ensure that the volume of mail handled by the Post Office and the profit that it generates increases rather than decreases. That can best be achieved, as every hon. Member who has spoken has accepted, by facing up to the fierce and growing competition to which the Post Office is subject.
It is easy to talk about competition without appreciating the impact that it has on the business of the Post Office. As my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) has already said, one of the most profitable sectors of Post Office business is the delivery of bulk business-to-business commercial circulars. The Dutch post office, PTT, to which reference has already been made, has become extremely skilful at bidding for bulk United Kingdom direct mail business. That mail goes from the United Kingdom to destinations outside our country. PTT has been most successful at creaming off business that would otherwise have gone to Royal Mail.
The Dutch post office has now gone further, however, because it has succeeded in bidding for bulk mail destined for United Kingdom addresses. According to the accounting conventions operated by the Universal Postal Union, four fifths of the revenue raised through the

postage rate goes to the country collecting the post and just one fifth goes to the country making that delivery. Where bulk mail business bound for destinations within the United Kingdom is taken on by an outside Post Office, Royal Mail bears the bulk of the costs and gains the minimum of the revenue. It is necessary to address that problem.
Why can the Dutch post office organise itself to win such business? The first reason is that it can make proper commercial quotations and charge proper commercial tariffs. In the statement made by my right hon. Friend the Member for Henley (Mr. Heseltine) in May 1995, some reference was made to Royal Mail being allowed to be more commercial in the deals that it makes. It must, however, still make deals according to fixed formulae. The Dutch post office does not have that constraint, so it can bid for a line of business at a price that it knows will secure it. Special tariffs for special customers is a commercial feature available to the Dutch post office but not available to Royal Mail.
Secondly, the Dutch post office can offer a combination of services, such as the fulfilment of a total postal requirement that covers designing and printing an item, enclosing it in an envelope, generating the address to which it can go and providing transport to take it there. Royal Mail is currently constrained from offering that combination, which customers want.
Thirdly, the Dutch post office is able to enter into realistic alliances and joint ventures. It does not have to ask the Dutch Government whether it is all right to make an alliance or a joint venture with a company; it can get on and do so. That is real commercial freedom.
It was encouraging, in one way, to note from the statement in May 1995 that we are starting to move in that direction, but we have not gone anywhere near far enough. Some Opposition Members have argued that it does not matter because foreign post offices do not have the right to deliver to United Kingdom addresses; the bulk of the business is a Royal Mail monopoly and therefore Royal Mail is protected. That is a misconceived point of view because it is based on the assumption that the post is an irreplaceable service. That is not so.
As a communication medium, writing on a piece of paper and sending it around the world carried by hand is a very outmoded concept, and will quickly be overtaken by all types of communication methods such as the Internet, e-mail, fax and all the others that were mentioned earlier. Royal Mail's problem is that its business is rooted in a function that is going out of date, and if there ever was an argument why it needs to be able to expand its repertoire, that must be it.
The strategy for the British Post Office should allow it to compete vigorously and effectively in its share of the postal market, whatever size that market may be, and to have the freedom to stake its claim to what will be the alternatives to carrying a piece of paper around the globe.
In my opinion, commercial freedom is vital, and commercial freedom in the public sector is a contradiction in terms. If commercial freedom means anything, it means the opportunity to take a risk—an argument that was well made by my hon. Friend the Member for Colchester, North (Mr. Jenkin). If the Post Office is in the public sector and it is allowed to take a proper risk, that risk is underwritten by the taxpayer. That is the central message that the Opposition parties need to be able to understand


and digest because, until they do, they will never adopt a policy on the Post Office that would give it a satisfactory future.
It is wrong that an organisation such as the Post Office has to seek the Government's approval whenever it wants to make a significant investment decision and that an obligation is placed on the Department of Trade and Industry to involve itself in such decisions, not only because it has a right to do so but because, as guardian of the taxpayer's money, it has a duty to do so. The Post Office must be allowed to set its own financial targets, to make its own investment decisions and to raise capital when it needs to do so.
Opposition Members have complained about the level of the external financing limit. I entirely accept the basis of their complaint—that the EFL is far too high and that it inhibits the Post Office—but the answer is to replace the EFL with the corporation tax that the Post Office, as a public company, would pay like any other public company.
As things stand, Royal Mail is undoubtedly destined to lose business on a global scale unless steps are taken. Other post offices, such as the Swedish post office, the Dutch post office and PostDienst in Germany, have recognised that fact. Theo Jongsma, the managing director of PTT, when visiting London in 1994, said:
I support the privatisation of postal companies worldwide".
That view is shared by chief executives of other leading European post offices. We must have a strong, profitable Post Office if we are to preserve the uniform price and universal delivery to which the Government are committed and which my hon. Friend the Member for North-West Hampshire (Sir D. Mitchell) stressed. Profits are the best way of ensuring that those undertakings are met.
Finally, I join my hon. Friend the Member for Gainsborough and Horncastle in predicting that Post Office privatisation will occur in the not too distant future. I further predict that, when it occurs, the unions that are linked to so many Labour Members who currently oppose privatisation will be the first to invest in it.

Mr. Roger Stott: Like my colleagues, I am a sponsored member of the Communication Workers Union and I freely declare that interest. My hon. Friend the Member for Falkirk, East (Mr. Connarty) explained to the House precisely what that means: none of us receives any financial payment for the honour of being sponsored by the union.
I am sorry that the hon. Member for Gainsborough and Horncastle (Mr. Leigh) has left the Chamber. Last year he and I participated in a debate at Durham university, where he was a former student. That evening he had the unenviable task of defending the following motion: "That the House has no confidence in Her Majesty's Government". I won the debate and the hon. Gentleman, who was then a member of Her Majesty's Government, was subsequently sacked from it.
I am sorry that the hon. Gentleman is not present to hear my remarks tonight, as I am always interested to hear what he has to say about these matters. He is a Thatcherite, and such people are now restricted to the political Jurassic Park. The hon. Gentleman wanders around in a field. He is let out occasionally to graze; he is then returned to the field and the gate is closed.
The hon. Member for Gainsborough and Horncastle suffers from the political equivalent of mad cow disease: he believes that we should adopt the principles of privatisation and the free market. [Interruption.] If the parliamentary private secretary, the hon. Member for Worcester (Mr. Luff), will be quiet for a moment, I shall deliver my speech in my own way.
The hon. Member for Gainsborough and Horncastle derided the concept of public service in his speech. Many years ago when I worked for the Post Office—admittedly, I was a telephone engineer and not a postman—I was proud of the public service that I performed. I know that the members of my union—including the postmen and women—are very proud of the public service that they provide. They do not simply deliver letters, issue stamps at a Crown post office, or pay social security benefits at a sub-post office: they are imbued with a sense of public service.
If the milk bottles are on the doorstep of an old-aged pensioner's house three days after they should have been removed, it is the postman or woman who reports it to the police or the local social services. They are much more than deliverers of letters: they are an essential part of the community. They take burgeoning pride in the fact that they are public servants—just as I did when I was a public servant working for the Post Office.
I remember connecting electricity late one winter's night for a farmer whose sheep were lambing. I did not do that because I was being paid overtime; I did it because it was my job. Postmen and women do the same thing. What is wrong with the principle espoused by Rowland Hill, the founder of the modern British Post Office— no matter where a person lives, be it in Land's End or the Shetland Isles, when he buys a second-class or first-class stamp he pays the same price as everyone else. It is not the private market but public service dedication that guarantees that his letter will be delivered—even if the postman has to put a sack on his back and walk 15 miles over the hills. For the price of a 19p second-class stamp, the letter will be delivered.
I do not want to hear any more from Conservative Members about deriding the concept of public service because—as the Father of the House said—their constituents value the public service ethic imbued in the members of today's Post Office.
Much has been said about the milch cow effect that the Government have on the Post Office. I am a simple soul— a telephone engineer who became a politician. I never understand the problem with allowing the Post Office to have a different EFL formula. Why must we constrain what is undoubtedly a very profitable business with Treasury mumbo-jumbo? The hon. Member for Gloucester (Mr. French) said that the taxpayer guarantees the Post Office while it remains in the public sector. Is he saying that the Post Office will go bust if the public sector borrowing rules are relaxed? Of course it will not. A little more imagination is required—and that seems lacking on the Conservative Benches—with anything to do with the public sector. As my right hon. Friend the Member for Derby, South (Mrs. Beckett) said, we should examine the potential for developing the Post Office in the public sector as a profitable business and releasing the shackles of Treasury constraint and phoney EFL rules.
For all the theorising of the Jurassic Park hon. Member for Gainsborough and Horncastle, the constituents of Conservative Members will not allow them to privatise


the Post Office. If Conservative Members want to be turkeys voting for an early Christmas, they should support privatisation. They will not win the next general election if that measure is in the Conservative manifesto.

Mr. Anthony Coombs: After that somewhat intemperate and antediluvian contribution from the hon. Member for Wigan (Mr. Stott), I shall refer to the comments of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), who spoke about a pragmatic approach to privatisation. Ever since I first became interested in privatisation in 1978, I have taken the entirely pragmatic view that it should be agreed only if it gives significant consumer benefits in terms of price, quality and service.
It is arrogant of the Opposition to table a motion that opposes even the stated intention of reopening the question of privatising the Royal Mail and Parcelforce. The Opposition do not even want to examine the arguments; they proceed from the ideological basis that the arguments should not be put to the British people.
Even more arrogant was the hon. Member for Falkirk, East (Mr. Connarty). When he was confronted with the facts by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh)—who pointed out that the Conservative party, having privatised no fewer than 57 companies and public sector institutions, won the 1983, 1987 and 1992 general elections—the hon. Gentleman said that that was not the result of any decision by the electorate but the consequence of
slavish adherence to their party.
The fact that the Conservatives got 19 million votes— a record—at the last election shows that that is patent nonsense.

Ms Church: rose—

Mr. Coombs: I do not have time to give way if I am to leave enough time for the winding-up speeches.
I come from the constituency where Roland Hill was born. We celebrated the 200th anniversary of his birth a few weeks ago. I support a universal letter service and a nationwide system of post offices, at a uniform price. I also recognise that, under a Conservative Government, the Post Office has taken significant steps forward, many of which have already been mentioned. The volume of mail has risen by 50 per cent. in the past 10 years.
Through its customer first culture—a 1993 survey confirms this—the Post Office has become more generally appreciated by the public. Postal charges have not risen since 1993 and are lower than they were in 1979, and last year the Post Office made a profit of £472 million. All this is evidence of an efficient organisation, but one operating as a monopoly. That enables it to produce results that might not be possible in a competitive market.
Although the organisation is commercial, it is operating in a significantly changing environment, which was described by my hon. Friend the Member for Gloucester (Mr. French). The changes usually involve technology: e-mail, telexes, faxes, interactive television and cable. All will begin to eat into the traditional market held by

the Post Office. The United States experience shows that only 15 per cent. of international express mail is now dealt with by public post offices. My hon. Friend the Member for Gloucester talked about the Dutch privatisation and the inroads that have been made into the British bulk mail market. The Swedish Government have ended the monopoly of their service; the same goes for Canada and New Zealand. The German Government have just privatised their telecommunications business, so they will be looking for additional international outlets.
This, therefore, is an increasingly competitive international business. Two years ago, The Economist wrote:
Those post offices that find new markets and cut costs—meaning those that are privatised—will be the ones that thrive. That means not just nationally but internationally. Cross-border business mail is growing fast. And successful private mail operators, like other privatised utilities, could one day invest direct in foreign businesses, galvanising sleepy local competition. For those that are held back by their political masters, the future would then be a bleak one, as shrunken suppliers of traditional domestic physical mail.
That is why I believe that, while Post Office Counters can be kept in the public sector and arrangements can be made to keep our network of already generally private post offices, and although the business of post offices is set to increase—insurance, bulk cash handling, banking, sales of tickets, pensions and driving licences—the organisation must go forward to the privatisation of Royal Mail and Parcelforce, and it should happen not on a 51 per cent. basis but on a 100 per cent. basis.
Competition must result from the privatisation. Ninety per cent. of the population, following the privatisation of BT, now have access to alternative services such as Mercury. Similarly, we must introduce a duopoly, or even greater competition, to the postal services market. That would lead to the sort of expansion that everyone in the House wants, and it would allow the Post Office to compete as it wants to. It would be quite consistent with the privatisation policy of this Government which has been such a success.
The Economist had this to say:
One of the Conservatives' clearest triumphs over the past 15 years has been the privatisation of state-owned companies. Fat nationalised industries have been transformed into fit and profitable enterprises. Huge subsidies have been eliminated. The prices of phone calls, electricity and gas have dropped in real terms. Services have improved strikingly. Eager to learn from this success, scores of governments have studied the British example".
That is precisely what has happened in the case of British Telecom, British Gas, the water companies, British Aerospace, British Airways, Rolls-Royce and the rest of the 57 companies that the Government have privatised. The lesson has been learnt: privatisation means increased competition, more commitment, lower prices, more investment and better quality for the consumer.
What I find so nauseating is the fact that, although the Labour party pretends to be market-friendly and to approach subjects such as this in a way that is likely to assist the consumer, we find at every turn that it is the friend of the producer and the trade unions. It is no coincidence that all the Labour Members who have spoken in the debate have been sponsored by trade unions in the industry.
Labour Members says that they are objective. Why, then, did they oppose every privatisation proposed by the Government? They say that they want to examine the


issues objectively and sensibly. Why, then, do they not even want to engage in a study of the potential of telecommunications privatisation? They pretend to be the consumer's friend; yet they insist on interference and bureaucracy that would damage the consumer's interests. Most hypocritical of all, they say that they favour a stakeholder society—yet they would deny us privatisation, under which the number of private shareholders has risen from 3 million when the Conservatives were first elected to more than 11 million now. If that is not a stakeholding in British industry, I do not know what is.
Like Labour's policies, the motion is redolent of the party's hypocrisy in regard to industrial and economic matters. I urge the House to reject it.

Dr. Kim Howells: Madam Deputy Speaker—[Interruption.] I am sorry, Mr. Deputy Speaker. I was so intrigued by the speech of the hon. Member for Wyre Valley—[HON. MEMBERS: "Wyre Forest."] I mean the hon. Member for Wyre Forest (Mr. Coombs). Obviously I have valleys on the brain. Anyway, I was so intrigued by his speech that I failed to observe your arrival in the Chair, Mr. Deputy Speaker.
The comments of the hon. Member for Wyre Forest were not appropriate. We chose this topic for debate because we are interested not only in the issue of Post Office privatisation, but in what happens to the Post Office in general. The motion refers to the future of the Post Office. I am sure that, like me, my hon. Friends are genuinely interested in debating the subject: that is why we are here tonight.
I valued not just the wisdom of those of my hon. Friends who have spoken this evening—some spoke from experience—but the contribution of the Father of the House, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) and, for different reasons, that of the hon. Member for Gainsborough and Horncastle (Mr. Leigh). Both showed up the sham of the amendment. The Father of the House pointed out that the commitment to privatisation was conspicuous by its absence; indeed, he said that he would vote with the Government precisely because the amendment was vague, and pointed out that the Government were not going to privatise the Post Office. Nothing could be more damning than that. I look forward to hearing what the Minister has to say about whoever drafted the amendment: I cannot believe that he drafted it himself.
The speech of the hon. Member for Gainsborough and Horncastle was interesting. It was, at least, an honest, forthright and at times courageous statement that the Government should privatise the Post Office. The Government, however, are afraid to say whether they will do so.
Hon. Members' speeches have reflected in the House the public reactions of hon. Members to the Prime Minister's Frost interview in January. It is worth recalling the words of the hon. Member for Harrow, East (Mr. Dykes) who said:
I think it would be both astonishing and unwise to revive this matter again. The post office runs perfectly well as a successful and profitable public corporation, unlike other industries which have been privatised in the past. I do not believe its privatisation would command any strong public support in the next election.

The hon. Member for Broxtowe (Sir J. Lester) said:
It is still an efficient post office … I am lukewarm, to say the least, about the case for putting anything in the manifesto.
Such reactions are by no means limited to hon. Members. The passions aroused by the issue of Post Office privatisation are shared widely throughout the United Kingdom. The Prime Minister recognised that when, in the same Frost interview, he said:
We are democrats and if we can't get something through Parliament then we can't do it.
That quotation has the hallmarks of the Prime Minister's peculiar syntax, but I use it anyway.
Why on earth has the Prime Minister announced that he wants to have another shot at the privatisation of the Post Office? Is it because the Government have yet to find an ideological successor to the privatisation programme of his predecessor in the 1980s?

Mr. Stephen Day: Will the hon. Gentleman give way?

Dr. Howells: No, I am sorry but I do not have time.
Are we to view that announcement as part of the legislative programme outlined in last year's Queen's Speech which Conservative central office described as
pushing forward radical policies for the millennium"?
I am glad that the Government Whip, the hon. Member for Plymouth, Sutton (Mr. Streeter), agrees with that. To privatise or not to privatise is the totality of the Tory vision for Britain.
The hon. Member for Harrow, East said that the Post Office runs perfectly well as a successful and profitable public corporation, and we must all agree. The evidence is irrefutable. Last year, it made £472 million profit. The Government certainly agree with him. That is why the Chancellor announced last November that the Government were requiring the Post Office to provide an additional £400 million for the Treasury coffers during the next three years. They will milk the Post Office, not for £532 million as the previous President of the Board of Trade, now the Deputy Prime Minister, said last May, but for £925 million.
If it works, why fix it? That was a question that the consultancy, London Economics, examined in its critique of the Government's Green Paper on the future of the postal service. It concluded:
Privatisation itself is not a fundamental driver of efficiency improvement. Competition, effective regulation and a determination to restructure the business when necessary matter more.
Why do not the Government understand that? The British people do. That is why they trust the Post Office. Polling evidence, which has been quoted by hon. Members on both sides of the House, tells us that they believe it to be efficient, safe, competitively priced, community based and accountable and, through its Crown post offices and sub-post offices, it constitutes a functioning social centre in most communities. As my hon. Friend the Member for Wigan (Mr. Stott) reminded us so forcibly, the British people perceive it as being staffed by individuals who know and care about the communities that they serve.
The Post Office is one of the great popular institutions, binding together all parts of the United Kingdom. The Government must know that countries such as ours do not


hang together without some form of social and cultural cement, be it a common history of opposition to tyranny or an affection for institutions as diverse as the Queen's Christmas message or the theme tune from "EastEnders". We hear endless homilies from the Government about how important it is for the British people to recognise the strength that we have in unity. It is curious that they seem unprepared to consider the possibility of strengthening this great national institution.
People trust the Post Office. They trust postal staff and, in particular, they trust postmen and postwomen. If anybody wants proof of how far the public trust them, I challenge the Government to try to make a lovable children's cartoon hero out of Private Pension Adviser Albert and see how he gets on in the television ratings against Postman Pat.
The Post Office brand name is invaluable to it. Its red vans and office signs are among the best known of all liveries in the world. It guarantees good and reliable service, uniform prices and universal delivery. No matter what the Government might promise to convince us that they are interested in protecting those guarantees, the public do not believe it, and with good reason.
By international standards, the Post Office is very efficient and its services are competitively priced. If it is given sufficient powers by the Government, it will be capable of meeting all its commercial challenges from home and abroad. Will the Government give it those powers? On the contrary. When the Chancellor announced his intention to levy the extra £400 million on Post Office profits, he was levying a new tax on the public through the inevitable increase in stamp charges. Why did he decide to do that? Because the new levy makes sense only if it is interpreted as an attempt to sabotage the image of the Post Office as a profitable concern—in other words, to blacken its name in the eyes of the public. It is the softening-up process for privatisation.
From the same briefing document to which the hon. Member for Gainsborough and Horncastle referred, the Association of International Courier Express Services and DHL made no secret of the fact that they are, as they put it,
extremely conscious of the value of the universal service provided by the Royal Mail
and none of the Government's proposals for extending competition in the postal services seeks to undermine that service. Why should they? Those organisations, which represent 95 per cent. of the United Kingdom's express distribution industry, also represent the commercial interests of some 60,000 employees. That is 60,000 households that know the value of the service that the Post Office provides. Those organisations demand not that the Government should start to dismember the Post Office or bleed it to death but that they should get their act together on examining and strengthening the rules of competition so that the express distribution companies have an equal opportunity to compete.
Their aspirations are not a world apart from those expressed by the Post Office chief executive, Mr. John Roberts, and his managers in the aftermath of the Chancellor's November announcement. They are as acutely aware as the private operators of the challenges posed by the European Commission's draft directive and,

more worrying, the draft notice on the implementation of proposals and timetables for the liberalisation of postal services in the European Union. Through the media grapevine, they have made it abundantly clear that the Chancellor's increases in the negative external financing limit are likely to mean that they will be damaged in their attempt to meet those challenges.
If the indirect extraction of capital is too great, it will leave little funding for the Post Office's investment programme and the competitiveness of the Post Office will be affected. That in turn could have an adverse effect on the quality of service and give the Government the perfect excuse for arguing that the only way for the Post Office to compete successfully is through privatisation. That is happening at a critical time for Post Office Counters. A huge modernisation programme is about to be implemented there under the private finance initiative. If any project demands a secure and consistent business climate, it is that one, but it is not likely to enjoy such a climate because the Prime Minister's statement has nothing to do with improving the performance of postal services.
The Government have decided to privatise the Post Office through a secret agenda and not openly. I have no doubt whatever about that. That is why the Government's amendment is so weak and inconclusive. The Prime Minister is considering, once again, the privatisation of the industry for one reason only: he needs to throw his own right wing—many of whom have been represented here tonight—some red meat occasionally, and the latest lump of red meat is this reheated bit tonight. He will not be able to look to the Post Office for support, as I do not think that Mr. John Roberts will take the same line as his predecessor. He has made it clear that he wants to get on with the job that he is paid for: making this a successful, efficient and profitable business. Judging by the Post Office's financial results, it seems that it has been doing that job well.
This is a case of the worst sort of political interference in the affairs of a healthy and forward-looking company. The Post Office is asking questions that are generated by the commercial realities of national and international competition, but it is receiving nothing more by way of a reply from the Prime Minister than the whine of internal party conflicts on the Conservative Benches.
Why do the Government bother when the best that the Prime Minister could come out with on Post Office privatisation in his fateful interview with Sir David Frost was:
I would like to have seen it but there was no parliamentary majority for it … We will look again and see if it is a subject for the next Parliament when we come to look at the manifesto.
Talk about hedging his bets. That statement is the worst sort of mischief-making. There is no courage in it, no determination. It is a tease. Will he or won't he? What he will do is remind everyone that this clapped-out Government have only one agenda: to cling to power by persuading their rebellious right-wing to troop through the Division Lobby. If that means sacrificing a first-class postal service, so be it, says the Prime Minister. That is why I commend the motion to the House.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Phillip Oppenheim): I am grateful for this chance to reply to the debate. I have


listened carefully to all the speeches and I especially enjoyed the speech of my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who has much experience in this sector, and of my hon. Friends the Members for Gloucester (Mr. French) and for Wyre Forest (Mr. Coombs), with which I agreed.
I was interested also in what Opposition Members said about possible Post Office privatisation. I remind those who bothered to turn up to what, after all, is a debate on an Opposition motion—at one point, only seven Opposition Members were here, most of whom seem to be sponsored by the Post Office union—of the comments that some of their predecessors have made about earlier privatisations. When we privatised British Airways, the Labour spokesman said that it would become
the pantomime horse of capitalism".—[Official Report, 19 November 1979; Vol. 974, c. 125.]
The person who said that was the hon. Member for Glasgow, Garscadden (Mr. Dewar), who now sits on the Opposition Front Bench and is the Labour Chief Whip. What happened is that British Airways has been transformed from the airline that was rated below Aeroflot by its passengers, to the world's favourite airline, carrying more international passengers than any other in the world. It is the most profitable and the largest airline in Europe. French, Italian and Spanish taxpayers are still contributing hundreds of millions of pounds keeping their sad, state-owned flag carriers in the air, but British Airways is contributing money to hospitals and schools—not bad for a pantomime horse.

Mr. Connarty: On a point of order, Mr. Deputy Speaker. We have limited time. Could you persuade the Minister to return to the subject of the debate?

Mr. Deputy Speaker (Mr. Michael Morris): I was not aware that the Minister had left it.

Mr. Oppenheim: As the hon. Gentleman spoke for 22 minutes and then left the Chamber—no doubt to collect his cheque from his union sponsors—

Mr. Connarty: On a point of order, Mr. Deputy Speaker.

Mrs. Beckett: Will the Minister give way?

Mr. Oppenheim: I am not giving way.

Mr. Deputy Speaker: Order. Is the right hon. Lady raising a point of order?

Mrs. Beckett: I do not think that the Minister has given way. I ask him again to do so.

Mr. Oppenheim: I have only a short time left. Opposition Members spoke for too long.

Mrs. Beckett: rose—[Interruption.]

Mr. Deputy Speaker: Order. We cannot possibly have two hon. Members shouting across the Dispatch Box. The right hon. Lady has the Dispatch Box.

Mrs. Beckett: I was saying that the Minister has made a disgracefully worded allegation against my hon. Friend the Member for Falkirk, East (Mr. Connarty). He should withdraw it, according, I think, to the rules of the House.

Mr. Oppenheim: Had the right hon. Lady been in the Chamber for her hon. Friend's 22-minute speech, she would know that he admitted to being sponsored by the union.
On Second Reading—

Mr. Connarty: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I hope that this is a genuine point of order.

Mr. Connarty: It is, Mr. Deputy Speaker. The Minister said that I left the Chamber to receive a cheque from another organisation. That was an accusation that I took money in my hand, when I had explained that I received no money from anyone. I believe that that was a severe abuse of the Minister's position, and I ask him to withdraw it. I ask you to instruct him to withdraw it, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. If the Minister said that the hon. Gentleman received a cheque for his speech— [Interruption.] Order. If that is what the Minister said, that was not an appropriate charge, and I should be grateful if he would withdraw it.

Mr. Oppenheim: As the hon. Gentleman is so sensitive about his union sponsorship, of course I withdraw.
On Second Reading of the Telecommunications Bill— the Act that privatised BT—the Labour spokesman, the right hon. Member for Salford, East (Mr. Orme), said:
The public telephone box could be threatened with extinction."—[Official Report, 18 July 1983; Vol. 46, c. 41.].
Instead, the number of BT call boxes has risen by 30 per cent., and now they work. Getting a telephone line in the 1970s, when the hon. Member for Wigan (Mr. Stott) was up his telegraph pole, was like trying to get an interview with the Pope. Now one can get a telephone in seven days.
It is not only in the utilities that privatisation has brought benefits. As a nationalised industry, British Steel was the world's largest loss-maker. Now it is the most efficient steel producer in Europe, and one of the best in the world. British Aerospace has overtaken state-owned Aerospatiale of France to become Europe's biggest defence and aerospace manufacturer. Unlike the French company, British Airways makes a profit. Rolls-Royce, on the borders of my constituency, has increased its share of the world civil aero-engine market from 10 to 30 per cent.
Best and perhaps most important of all, whereas in 1979 state-run industries were depriving hospitals and schools in Britain of £85 million a week—that is what they cost to run—the privatised industries are now contributing £55 million a week in taxes to our schools and hospitals.

Ms Church: What about the Post Office?

Mr. Deputy Speaker: Order. The hon. Lady cannot keep yelling the words "Post Office". I draw her attention to the amendment.

Mr. Oppenheim: I am glad that the Opposition chose to debate the Post Office, because we have a policy and they do not. We have a policy, because the past 16 years have shown that privatisation has resulted in more investment, better services and lower prices.
We have our policies in place. Now the Opposition, who called the debate, should say what their policy is. Tonight they have complained about the external financing limit. Let us hear what their policy is. I challenge the Opposition spokesman, the right hon. Member for Derby, South (Mrs. Beckett), to say whether a future Labour Government, if there is one, will reduce the external financing limit. Will she or will she not? Of course she will not.
I am told that a Labour party publication called Women Today recently held a competition inviting people to
Win a day in Parliament—all you have to do is say in no more than 100 words what the policies and priorities of a Labour Government would be.
Obviously we shall have to wait until those good ladies have returned their answers before we hear any clear policies from the Opposition.
As usual, all we have heard from the Opposition is motherhood and apple pie—political escalator muzak, meaningless waffle. But perhaps I am being unfair, because the Opposition are clear about one thing: the core values of new Labour's great visionary forward-looking project do not include an acceptance of the benefits of privatisation.
That sits oddly with Labour's stated desire to make new Labour more like Europe's social democratic parties. Over the past decade, privatisation has been accepted by social democrats in Sweden, Holland and Belgium. Even the socialists in France, Italy and Spain have accepted it. Even in Vietnam and Cuba, they are beginning to see the light. Who does that leave? It leaves new Labour and North Korea; the Leader of the Opposition and Kim Jong II walking in lockstep to oblivion.
I invite the House to reject the Opposition motion and support the Government amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 255, Noes 289.

Division No. 46]
[10.00 pm


AYES


Adams, Mrs Irene
Brown, N (N'c'tle upon Tyne E)


Ainger, Nick
Bruce, Malcolm (Gordon)


Allen, Graham
Burden, Richard


Anderson, Ms Janet (Ros'dale)
Byers, Stephen


Armstrong, Hilary
Caborn, Richard


Ashton, Joe
Callaghan, Jim


Austin-Walker, John
Campbell, Mrs Anne (C'bridge)


Banks, Tony (Newham NW)
Campbell, Menzies (Fife NE)


Barron, Kevin
Campbell, Ronnie (Blyth V)


Battle, John
Campbell-Savours, D N


Bayley, Hugh
Canavan, Dennis


Beckett, Rt Hon Margaret
Chidgey, David


Beggs, Roy
Chisholm, Malcolm


Beith, Rt Hon A J
Church, Judith


Bell, Stuart
Clapham, Michael


Benn, Rt Hon Tony
Clark, Dr David (South Shields)


Bennett, Andrew F
Clarke, Tom (Monklands W)


Benton, Joe
Clelland, David


Bermingham, Gerald
Coffey, Ann


Berry, Roger
Cohen, Harry


Boateng, Paul
Connarty, Michael


Bradley, Keith
Cook, Frank (Stockton N)


Bray, Dr Jeremy
Cook, Robin (Livingston)


Brown, Gordon (Dunfermline E)
Corbett, Robin





Corbyn, Jeremy
Jones, Barry (Alyn and D'side)


Corston, Jean
Jones, leuan Wyn (Ynys Môn)


Cousins, Jim
Jones, Jon Owen (Cardiff C)


Cummings, John
Jones, Lynne (B'ham S O)


Cunliffe, Lawrence
Jones, Martyn (Clwyd, SW)


Cunningham, Jim (Covy SE)
Jones, Nigel (Cheltenham)


Dafis, Cynog
Jowell, Tessa


Dalyell, Tam
Kaufman, Rt Hon Gerald


Darling, Alistair
Keen, Alan


Davidson, Ian
Kennedy, Jane (L'pool Br'dg'n)


Davies, Bryan (Oldham C'tral)
Khabra, Piara S


Davies, Chris (L'Boro & S'worth)
Kilfoyle, Peter


Davies, Rt Hon Denzil (Llanelli)
Kirkwood, Archy


Davies, Ron (Caerphilly)
Liddell, Mrs Helen


Denham, John
Litherland, Robert


Dewar, Donald
Livingstone, Ken


Dixon, Don
Lloyd, Tony (Stretford)


Dobson, Frank
Llwyd, Elfyn


Donohoe, Brian H
Loyden, Eddie


Dowd, Jim
Lynne, Ms Liz


Dunwoody, Mrs Gwyneth
McAllion, John


Eagle, Ms Angela
McAvoy, Thomas


Eastham, Ken
McCartney, Ian


Etherington, Bill
McCartney, Robert


Evans, John (St Helens N)
Macdonald, Calum


Ewing, Mrs Margaret
McFall, John


Fatchett, Derek
McKelvey, William


Faulds, Andrew
Mackinlay, Andrew


Field, Frank (Birkenhead)
McLeish, Henry


Fisher, Mark
McMaster, Gordon


Flynn, Paul
MacShane, Denis


Foster, Rt Hon Derek
McWilliam, John


Foster, Don (Bath)
Madden, Max


Foulkes, George
Maddock, Diana


Fyfe, Maria
Mahon, Alice


Galbraith, Sam
Mandelson, Peter


Galloway, George
Marek, Dr John


Gapes, Mike
Marshall, David (Shettleston)


Garrett, John
Martin, Michael J (Springburn)


George, Bruce
Martlew, Eric


Gerrard, Neil
Maxton, John


Gilbert, Rt Hon Dr John
Meacher, Michael


Godman, Dr Norman A
Meale, Alan


Golding, Mrs Llin
Michael, Alun


Gordon, Mildred
Michie, Bill (Sheffield Heeley)


Griffiths, Nigel (Edinburgh S)
Michie, Mrs Ray (Argyll & Bute)


Griffiths, Win (Bridgend)
Milburn, Alan


Grocott, Bruce
Miller, Andrew


Gunnell, John
Mitchell, Austin (Gt Grimsby)


Hall, Mike
Moonie, Dr Lewis


Hanson, David
Morgan, Rhodri


Harman, Ms Harriet
Morley, Elliot


Harvey, Nick
Morris, Rt Hon Alfred (Wy'nshawe)


Hattersley, Rt Hon Roy
Morris, Estelle (B'ham Yardley)


Heppell, John
Morris, Rt Hon John (Aberavon)


Hill, Keith (Streatham)
Mowlam, Marjorie


Hinchliffe, David
Mudie, George


Hodge, Margaret
Mullin, Chris


Hoey, Kate
Murphy, Paul


Hogg, Norman (Cumbemauld)
Nicholson, Emma (Devon West)


Home Robertson, John
Oakes, Rt Hon Gordon


Hoon, Geoffrey
O'Brien, Mike (N W'kshire)


Howarth, Alan (Straf'rd-on-A)
O'Brien, William (Normanton)


Howarth, George (Knowsley North)
O'Hara, Edward


Howells, Dr Kim (Pontypridd)
Olner, Bill


Hoyle, Doug
Orme, Rt Hon Stanley


Hughes, Kevin (Doncaster N)
Parry, Robert


Hughes, Robert (Aberdeen N)
Pearson, Ian


Hughes, Roy (Newport E)
Pendry, Tom


Hughes, Simon (Southwark)
Pickthall, Colin


Hutton, John
Pike, Peter L


Illsley, Eric
Pope, Greg


Ingram, Adam
Prentice, Bridget (Lev'm E)


Jackson, Glenda (H'stead)
Prentice, Gordon (Pendle)


Jackson, Helen (Shef'ld, H)
Prescott, Rt Hon John


Jamieson, David
Purchase, Ken






Quin, Ms Joyce
Stott, Roger


Radice, Giles
Strang, Dr. Gavin


Randall, Stuart
Sutcliffe, Gerry,


Raynsford, Nick
Taylor, Mrs Ann (Dewsbury)


Reid, Dr John
Taylor, Matthew (Truro)


Rendel, David
Touhig, Don


Robertson, George (Hamilton)
Turner, Dennis


Robinson, Geoffrey (Co'try NW)
Tyler, Paul


Roche, Mrs Barbara
Vaz, Keith


Rooker, Jeff
Wallace, James


Rooney, Terry
Walley, Joan


Ross, Ernie (Dundee W)
Wardell, Gareth (Gower)


Rowlands, Ted
Wareing, Robert N


Ruddock, Joan
Watson, Mike


Sedgemore, Brian
Wicks, Malcolm


Sheerman, Barry
Wigley, Dafydd


Sheldon, Rt Hon Robert
Williams, Rt Hon Alan (Sw'n W)


Shore, Rt Hon Peter
Williams, Alan W (Carmarthen)


Short, Clare
Wilson, Brian


Simpson, Alan
Winnick, David


Skinner, Dennis
Wise, Audrey


Smith, Andrew (Oxford E)
Worthington, Tony


Smith, Chris (Isl'ton S & F'sbury)
Wray, Jimmy


Smith, Llew (Blaenau Gwent)
Wright, Dr Tony


Snape, Peter
Young, David (Bolton SE)


Soley, Clive



Spellar, John
Tellers for the Ayes:


Squire, Rachel (Dunfermline W)
Mr. Eric Clarke and Mr. Robert Ainsworth.


Steinberg, Gerry





NOES


Ainsworth, Peter (East Surrey)
Carttiss, Michael


Aitken, Rt Hon Jonathan
Cash, William


Alexander, Richard
Channon, Rt Hon Paul


Alison, Rt Hon Michael (Selby)
Chapman, Sir Sydney


Allason, Rupert (Torbay)
Churchill, Mr


Arbuthnot, James
Clappison, James


Arnold, Jacques (Gravesham)
Clark, Dr Michael (Rochford)


Ashby, David
Clarke, Rt Hon Kenneth (Ru'clif)


Atkins, Rt Hon Robert
Clifton-Brown, Geoffrey


Atkinson, David (Bour'mouth E)
Coe, Sebastian


Atkinson, Peter (Hexham)
Colvin, Michael


Baker, Nicholas (North Dorset)
Congdon, David


Baldry, Tony
Conway, Derek


Banks, Matthew (Southport)
Coombs, Anthony (Wyre For'st)


Banks, Robert (Harrogate)
Coombs, Simon (Swindon)


Bates, Michael
Cope, Rt Hon Sir John


Batiste, Spencer
Couchman, James


Bellingham, Henry
Cran, James


Bendall, Vivian
Currie, Mrs Edwina (S D'by'ire)


Beresford, Sir Paul
Curry, David (Skipton & Ripon)


Biffen, Rt Hon John
Davis, David (Boothferry)


Body, Sir Richard
Day, Stephen


Bonsor, Sir Nicholas
Deva, Nirj Joseph


Booth, Hartley
Devlin, Tim


Boswell, Tim
Dicks, Terry


Bottomley, Peter (Eltham)
Dorrell, Rt Hon Stephen


Bottomley, Rt Hon Virginia
Douglas-Hamilton, Lord James


Bowden, Sir Andrew
Dover, Den


Bowis, John
Duncan, Alan


Boyson, Rt Hon Sir Rhodes
Duncan-Smith, lain


Brandreth, Gyles
Dunn, Bob


Brazier, Julian
Durant, Sir Anthony


Bright, Sir Graham
Eggar, Rt Hon Tim


Brooke, Rt Hon Peter
Elletson, Harold


Brown, M (Brigg & Cl'thorpes)
Emery, Rt Hon Sir Peter


Browning, Mrs Angela
Evans, David (Welwyn Hatfield)


Bruce, Ian (Dorset)
Evans, Jonathan (Brecon)


Bums, Simon
Evans, Nigel (Ribble Valley)


Burt, Alistair
Evans, Roger (Monmouth)


Butcher, John
Evennett, David


Butler, Peter
Faber, David


Butterfill, John
Fabricant, Michael


Carlisle, John (Luton North)
Fenner, Dame Peggy


Carlisle, Sir Kenneth (Lincoln)
Field, Barry (Isle of Wight)


Carrington, Matthew
Fishburn, Dudley





Forman, Nigel
Lloyd, Rt Hon Sir Peter (Fareham)


Forsyth, Rt Hon Michael (Stirling)
Lord, Michael


Forth, Eric
Luff, Peter


Fowler, Rt Hon Sir Norman
Lyell, Rt Hon Sir Nicholas


Fox, Dr Liam (Woodspring)
MacGregor, Rt Hon John


Fox, Sir Marcus (Shipley)
MacKay, Andrew


Freeman, Rt Hon Roger
Maclean, Rt Hon David


French, Douglas
McNair-Wilson, Sir Patrick


Fry, Sir Peter
Maitland, Lady Olga


Gale, Roger
Malone, Gerald


Gallie, Phil
Mans, Keith


Gardiner, Sir George
Marland, Paul


Garnier, Edward
Marshall, John (Hendon S)


Gill, Christopher
Marshall, Sir Michael (Arundel)


Gillan, Cheryl
Martin, David (Portsmouth S)


Goodlad, Rt Hon Alastair
Mates, Michael


Goodson-Wickes, Dr Charles
Mayhew, Rt Hon Sir Patrick


Gorman, Mrs Teresa
Mellor, Rt Hon David


Gorst, Sir John
Merchant, Piers


Grant, Sir A (SW Cambs)
Mills, lain


Greenway, Harry (Ealing N)
Mitchell, Andrew (Gedling)


Greenway, John (Ryedale)
Montgomery, Sir Fergus


Griffiths, Peter (Portsmouth, N)
Needham, Rt Hon Richard


Gummer, Rt Hon John Selwyn
Neubert, Sir Michael


Hague, Rt Hon William
Newton, Rt Hon Tony


Hamilton, Rt Hon Sir Archibald
Nicholls, Patrick


Hamilton, Neil (Tatton)
Nicholson, David (Taunton)


Hampson, Dr Keith
Norris, Steve


Hanley, Rt Hon Jeremy
Onslow, Rt Hon Sir Cranley


Hannam, Sir John
Oppenheim, Phillip


Hargreaves, Andrew
Ottaway, Richard


Harris, David
Page, Richard


Hawksley, Warren
Paice, James


Hayes, Jerry
Patnick, Sir Irvine


Heald, Oliver
Patten, Rt Hon John


Heath, Rt Hon Sir Edward
Pattie, Rt Hon Sir Geoffrey


Heathcoat-Amory, David
Pawsey, James


Hendry, Charles
Peacock, Mrs Elizabeth


Heseltine, Rt Hon Michael
Pickles, Eric


Higgins, Rt Hon Sir Terence
Porter, Barry (Wirral S)


Hill, James (Southampton Test)
Porter, David (Waveney)


Hogg, Rt Hon Douglas (G'tham)
Portillo, Rt Hon Michael


Horam, John
Powell, William (Corby)


Howard, Rt Hon Michael
Rathbone, Tim


Howell, Rt Hon David (G'dford)
Redwood, Rt Hon John


Howell, Sir Ralph (N Norfolk)
Renton, Rt Hon Tim


Hughes, Robert G (Harrow W)
Richards, Rod


Hunt, Rt Hon David (Wirral W)
Riddick, Graham


Hunt, Sir John (Ravensbourne)
Robatnan, Andrew


Hunter, Andrew
Roberts, Rt Hon Sir Wyn


Jack, Michael
Robertson, Raymond (Ab'd'n S)


Jenkin, Bernard
Robinson, Mark (Somerton)


Jessel, Toby
Roe, Mrs Marion (Broxbourne)


Johnson Smith, Sir Geoffrey
Rowe, Andrew (Mid Kent)


Jones, Gwilym (Cardiff N)
Rurnbold, Rt Hon Dame Angela


Jones, Robert B (W Hertfdshr)
Sackville, Tom


Jopling, Rt Hon Michael
Sainsbury, Rt Hon Sir Timothy


Kellett-Bowman, Dame Elaine
Scott, Rt Hon Sir Nicholas


Key, Robert
Shaw, David (Dover)


King, Rt Hon Tom
Shaw, Sir Giles (Pudsey)


Kirkhope, Timothy
Shephard, Rt Hon Gillian


Knapman, Roger
Shepherd, Sir Colin (Hereford)


Knight, Mrs Angela (Erewash)
Shepherd, Richard (Aldridge)


Knight, Rt Hon Greg (Derby N)
Shersby, Sir Michael


Knight, Dame Jill (Bir'm E'st'n)
Sims, Roger


Knox, Sir David
Skeet, Sir Trevor


Kynoch, George (Kincardine)
Smith, Tim (Beaconsfield)


Lait, Mrs Jacqui
Soames, Nicholas


Lamont, Rt Hon Norman
Spencer, Sir Derek


Lang, Rt Hon Ian
Spicer, Sir James (W Dorset)


Lawrence, Sir Ivan
Spicer, Sir Michael (S Worcs)


Leigh, Edward
Spink, Dr Robert


Lennox-Boyd, Sir Mark
Spring, Richard


Lester, Sir James (Broxtowe)
Sproat, lain


Lidington, David
Squire, Robin (Hornchurch)


Lilley, Rt Hon Peter
Stanley, Rt Hon Sir John






Steen, Anthony
Wakten, George


Stem, Michael
Walker, Bill (N Tayside)


Stewart, Allan
Waller, Gary


Streeter, Gary
Ward, John


Sumberg, David
Wardle, Charles (Bexhill)


Sweeney, Walter
Waterson, Nigel


Sykes, John
Watts, John


Tapsell, Sir Peter
Wells, Bowen


Taylor, Ian (Esher)
Wheeler, Rt Hon Sir John


Taylor, Sir Teddy (Southend, E)
Whitney, Ray


Temple-Morris, Peter
Whittingdale, John


Thomason Roy



Thompson Sir Donald (C'er V)
Widdecombe, Ann


Thompson, Patrick (Norwich N)
Wiggin, Sir Jerry


Thornton, Sir Malcolm
Wilkinson, John


Thumham, Peter
Willetts, David


Townend, John (Bridlington)
Wilshire, David


Townsend, Cyril D (Bexl'yh'th)
Winterton, Mrs Ann (Congleton)


Tracey, Richard
Winterton, Nicholas (Macc'f'ld)


Tredinnick, David
Wolfson, Mark


Trend, Michael
Yeo, Tim


Trotter, Neville
Young, Rt Hon Sir George


Twinn, Dr Ian



Vaughan, Sir Gerard
Tellers for the Noes:


Viggers, Peter
Mr. Timothy Wood and Mr. Patrick McLoughlin.


Waldegrave, Rt Hon William

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House welcomes the substantial benefits which have flowed to customers from the Government's programme of privatisation; recognises that 19,000 of the 20,000 post offices in the United Kingdom are already in the private sector; and endorses the Government's continuing commitment to a universal postal service at a uniform and affordable tariff and a nationwide network of post offices.

DEREGULATION

Mr. Deputy Speaker (Mr. Michael Morris): With permission, I shall put together the motions relating to deregulation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 14A(1) (Consideration of draft deregulation orders),

That the draft Deregulation (Restrictive Trade Practices Act 1976) (Amendment) (Time Limits) Order 1995, which was laid before this House on 20th November, be approved.
That the draft Deregulation (Corn Returns Act 1882) Order 1995, which was laid before this House on 27th November, be approved.
That the draft Deregulation (Fair Trading Act 1973) (Amendment) (Merger Reference Time Limits) Order 1995, which was laid before this House on 20th November, be approved.
That the draft Deregulation (Restrictive Trade Practices Act 1976) (Amendment) (Variation of Exempt Agreements) Order 1995, which was laid before this House on 20th November, be approved. —[Mr. Knapman.]

Question agreed to.

PETITIONS

Sites of Special Scientific Interest

Mr. Hugh Bayley: I rise on behalf of hundreds of my constituents who are concerned that the Government are not doing enough to protect sites of special scientific interest. The petition says:
The petition of York Friends of the Earth and residents of York
Declares that we understand that every year between 200–300 Sites of Special Scientific Interest (SSSIs), our best wildlife sites, are damaged or destroyed.
The petitioners therefore request that the House of Commons urge the government to support Friends of the Earth's SSSI campaign by passing tougher laws to protect our best wildlife sites.
That is signed by Guy Wallbanks of York Friends of the Earth and 742 supporters of his cause.

To lie upon the Table.

Fire Stations (London)

Mr. John Austin-Walker: This is a petition from residents of Plumstead, Shooters Hill and the surrounding area. It is backed by a petition in similar words with 30,000 signatures that is being delivered to the Department of the Environment and more than 1,000 letters that I have received from constituents and organisations, including the community police consultative committee. The petition sheweth:
That it is proposed to close the Shooters Hill Fire Station, Woolwich SE18 3BT and that we the undersigned, vigorously oppose the planned closure, which will seriously reduce the fire cover available in the surrounding area putting both lives and property at risk. The danger will be compounded by the closure of the Downham Fire Station in the neighbouring Borough of Lewisham and the removal of a Fire Appliance from the East Greenwich Fire Station in Charlton. These cuts in fire cover are part of a package of proposals which will result in the closure of four fire stations across London and the removal of 22 Fire Appliances from other stations and result from the substantial cut in the resources available to the London Fire and Civil Defence Authority. Furthermore, categorisation of risks, and the attendance times based upon that categorisation, place a higher priority on protecting buildings than saving lives.
Wherefore your petitioners pray that your honourable House do urge the Secretary of State for the Environment to increase the Standard Spending Assessment for the LFCDA and urge the Home Secretary to conduct an independent review of risk categorisation and for them to intervene to prevent the closure of Shooters Hill Fire Station.

To lie upon the Table.

Libya and Iraq (Sactions)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Knapman.]

Mr. Tam Dalyell: The United Nations economic sanctions against Iraq have caused the death of more than 560,000 children since the Gulf war, according to a UN Food and Agriculture Organisation study reported in The Lancet. According to Dr. Mary Smith Fawzi of the Harvard School of Public Health,
Food prices are high, purchasing power is low, water and sanitation systems have deteriorated, hospitals are functioning at 40 per cent. capacity and the population is largely sustained by government rations which provide 1,000 calories per person per day.
An editorial in The Lancet states that Governments are now being unrealistic in expecting sanctions to cause Iraqis to rebel and notes:
Western arms and diplomacy have failed to unseat Saddam Hussein. Why expect a population enfeebled by disease to do so?
I have asked the Foreign Office to respond tonight to the moving "Thought for the day" that was given by the Bishop of Leicester, Dr. Tom Butler, of which I have given it a copy. He said:
Five years ago … the allied attack started in the Gulf War which drove the Iraqi army out of Kuwait. Hostilities ended with Saddam Hussein still in power, but we are told that his overthrow hadn't been the objective of the war.
An economic embargo was then imposed by the United Nations together with a ban on Iraqi sales of oil so denying it access to foreign exchange. The assumption obviously was that if life became sufficiently uncomfortable for the Iraqi people they would overthrow their leader.
Not surprisingly, this hasn't happened. It is rather like a teacher telling a class of frightened schoolboys to sort out the class bully themselves and that they would all be punished until they did so. Well, the Iraqi people have been well and truly punished and Saddam Hussein is still in power.
The bishop went on to say that, 18 months ago, he and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel)
visited Baghdad on a humanitarian mission to see how UN sanctions were affecting the Iraqi people. We were horrified by what we saw. We paid unannounced visits to modern hospitals staffed by Western trained doctors and nurses now operating in virtual stone age conditions without electricity, drugs, clean dressings or bedding. We saw children dying of diseases usually only seen in famine conditions in sub-Sahara Africa. Once people heard our English accents, they came up to us angrily demanding to know why the West was punishing them in this way.
It wasn't easy to answer for to withhold medical supplies from enemy civilians is against the Geneva conventions but, of course, we are not at war with Iraq and so the conventions do not apply. Neither is the UN totally refusing to allow medical supplies into Iraq but the Iraqi government say that it finds the conditions which would be imposed humiliating. We had several meetings with Iraqi ministers and were angered and frustrated by the way it seems to us that they were prepared to hold their own people hostage to put pressure on the West to totally lift sanctions when, with a modicum of goodwill, modest amounts of medical and food aid could be supplied to the Iraqi people without any great principle being breached.
But eighteen months later sanctions still bite into every Iraqi home and add to the climate of fear present everywhere. Meanwhile the world turns its attention to other trouble spots. In our own country this week there has been a call for a return to the teaching of

traditional moral standards. Well, with the ordinary people of Iraq in mind, let me remind you of some of Jesus's teaching in the Sermon on the Mount
Blessed are the poor in spirit, for theirs is the kingdom of heaven.
Blessed are the peacemakers for they shall be called children of God.
Blessed are they that mourn for they will be comforted.
It is not only left-wing Members of Parliament and bishops who take that view. The Saudi prince, who was the joint commander of the Gulf war allied forces, said that the United Nations should look for an alternative to sanctions against Iraq because the punitive measures had not worked. General Prince Khaled Bin Sultan told reporters after meeting Egypt's President, Hosni Mubarak, that sanctions imposed after the Iraqi invasion of Kuwait in 1990 had strengthened rather than weakened President Saddam Hussein's Government.
The sanctions have not achieved their aim
said the Saudi Prince
and we must look for another way. I am not against ending the sanctions on Iraq but they are based on UN conventions and resolutions … The alternative must come from the United Nations and from the only world superpower, the United States.
I do not know what the British Government have to say in reply.
Secondly, I shall discuss Lockerbie. At Inverness, at the meeting of the Scottish Grand Committee on 5 February 1996,I said:
May I ask a short question, which could be answered in three words, about the evidence that Law Officers claim to have on Lockerbie? Where physically is the crucial timing device and in whose possession?
The Lord Advocate replied:
As members of the Committee know well, it is not the policy of Lord Advocates to discuss in advance of trial any evidence relating to the guilt or innocence of the accused.
He told my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), who is in the Chamber tonight:
My position on the matter is clear. A petition warrant has been granted for the two individuals concerned and we are … ready to prosecute them in Scotland. The only reason why they are not in Scotland now is because of their actions and those of the Libyan Government. There will be no change of policy on my part to that adopted by my predecessor in trying to bring them to justice in Scotland."—[Official Report, Scottish Grand Committee, 5 February 1996; c. 6–8.]
I ask some questions. First, would any set of British Ministers, were the boot on the other foot, encourage two Scots whom they believed to be innocent to surrender themselves to a country with whom we had no extradition treaty?

Mr. John Austin-Walker: indicated assent.

Mr. Dalyell: I see my hon. Friend the Member for Woolwich (Mr. Austin-Walker) nodding in agreement because he has been to Libya and witnessed what the reaction is likely to be.

Mr. Austin-Walker: I have indeed had discussions with the lawyers for the two accused, and I believe that we would all agree that it is in the best interests of the accused and of the families of the victims of Lockerbie


that those accused are brought to trial soon. I have also had discussions, as my hon. Friend is aware, with the Secretary of the Arab League, who has made proposals, which I believe are acceptable to the defence counsel in Libya and to the Libyan Government, for a trial to take place in The Hague before Scottish judges under Scottish law. Does my hon. Friend consider that that would be a way to proceed, and would he urge the Government to accept that offer?

Mr. Dalyell: I do, and I believe that my hon. Friend's intervention is extremely important and must be replied to by the Government.
Secondly, are Her Majesty's Government prepared to allow our hostile relations with Libyans, many of whom were educated in Britain, to drift on indefinitely and for a longer period than our post-war hostility to Germany after massive bloodshed, mayhem and horror in the second world war?
Thirdly, how does information about the whereabouts of the timer, and in whose possession the timer is, in any way prejudice a trial? The truth, I believe, is that if the authorities have a timer at all, it is not the timer from Pan Am 103 but a different timer, probably acquired later via Senegal.
We do not know when the timer was found, who found it and what happened to it after it was found, and it beggars belief that such a sensitive device, after months of exposure to a Scottish winter, could, in fragments or otherwise, be in a pristine condition. It is all too clear why the Government will not show the timer to the makers, Edwin Bollier and Ulrich Lumpart—because they might identify it as not having been of a Libyan batch. Photographs are all that have been made available.
Pamela Dix, their secretary, speaking for the relatives of the Lockerbie victims, says that they are deeply suspicious of photographs and want an independent forensic inquiry, conducted by agreed experts. Will such an inquiry be considered?
Finally, can it be true that the Minister, in his meeting with the relatives, Dr. Swire and the Rev. John Mosey, said that the British Government were opposed to a trial in The Hague partly because they were worried about the possibility of wrongful acquittal? "Fear of wrongful acquittal"—did he say that?
It is my pleasure to give way to the hon. Member for Eastwood (Mr. Stewart), who has an honourable part in the discussion.

Mr. Allan Stewart: I congratulate the hon. Member for Linlithgow (Mr. Dalyell) on securing the debate on this important subject. I am grateful to him and to the Minister of State, my hon. Friend the Member for Upminster (Sir N. Bonsor), for agreeing to allow me to make a short contribution to the debate, in which I shall concentrate on the Libyan question. I begin by declaring an interest which appears in the Register of Members' Interests—I visited Libya last April as a guest of the Islamic Council of Scotland.
I do not intend to examine the position of the Crown Office. However, it is fair to say that many people with no particular axe to grind are having increasing doubts

about the Crown Office's position—particularly about why apparently solid evidence which might have led the Crown Office to a different conclusion has been rejected. I shall make two points about the sanctions policy.
First, what is the objective? The hon. Member for Linlithgow pointed out correctly that the objective is not succeeding in relation to Iraq. History shows that such economic sanctions do not succeed, and there is not the slightest evidence that such sanctions will be effective in achieving their declared purpose in relation to Libya— especially as there appears to be no real communication between the British and the Libyan Governments on the issue. I hope that my hon. Friend the Minister will be able to explain why the British Government are so opposed to the international court idea, to which the hon. Member for Woolwich (Mr. Austin-Walker) referred.
Finally, there is a widespread view that the British are the only people who are obeying the sanctions policy. The Americans are using the South Koreans to get around the policy and the Italians, being Italians—I do not want to sound like a Euro-sceptic—never obey any of those policies. The net result is that the British are obeying the sanctions and other countries are not. Great damage is therefore being done to jobs—particularly in the west of Scotland, given its export orientation—without achieving any political objective.
The policy cannot possibly continue for ever. What will be the end result? My hon. Friend the Minister is renowned for being fair and open-minded. I hope that he will seriously take on board the arguments put by the hon. Member for Linlithgow, who speaks tonight on behalf of many people.

The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): I am grateful to my hon. Friend the Member for Eastwood (Mr. Stewart) for his kind remarks at the end of his speech. I assure him that the Government and I are acutely aware of the great suffering of the relations of the victims of the appalling Lockerbie disaster. The Government will do everything we can to ensure that those responsible are brought to justice—that is the bond which unites all of us in the House tonight. However, we have substantial differences of opinion as to how that could best be achieved, and that is why we are debating the issue this evening.
I am slightly saddened that the hon. Member for Linlithgow (Mr. Dalyell) has raised the issue again, only two and a half months after he last raised it in the same terms on 29 November last year. It does not do the cause any good to run continually around this course when there are no new facts and no changes which might make the Government look at the issue afresh. We discussed the matter at great length during the debate on 29 November and I have met the hon. Gentleman and the families of the victims. We all want to achieve the objective of bringing to justice the persons responsible for a horrendous crime, but replaying the record when we have substantial differences of opinion on how to achieve that objective is not necessarily the best way forward. The hon. Gentleman raised precisely the same points today as when he was previously answered by my right hon. Friend the Minister of State, but he raised other points as well and I shall attempt to respond.

Mr. Dalyell: If that is not the best way forward, what is the best way?

Sir Nicholas Bonsor: The best way forward is that which the Government are adopting. I appreciate that the hon. Gentleman thinks that there are better ways. I know that he does not agree with us, but we have made it abundantly clear to him why we are taking the action that we are and going down the road that we are. I shall spell out the reasons again for the hon. Gentleman, so that there can be no conceivable doubt.
The hon. Member for Linlithgow quoted the Bishop of Leicester—and in fairness to the hon. Gentleman, he did so in full—but he paid no regard to the phrase used by the bishop in regard to the responsibilities of the Iraqi Government. The House will forgive me if I repeat that part of the bishop's broadcast. He said:
We had several meetings with Iraqi Ministers and were angered and frustrated by the way it seemed to us that they were prepared to hold their own people hostage to put pressure on the West to totally lift sanctions when, with a modicum of good will, modest amounts of medical and food aid could be supplied to the Iraqi people without any great principle being breached.
Responsibility for what is happening to the Iraqi people rests squarely with Saddam Hussein and his cohorts. Security Council resolution 986 would allow a net purchase of $2.5 billion worth of medical and humanitarian aid per annum in exchange for the oil that Iraq could sell. The UN conditions for providing that relief are perfectly reasonable, but Saddam Hussein's regime has consistently rejected them. I am not prepared to accept any responsibility on behalf of western Governments for the action of that evil man in denying to his people the aid that is available to them.
The $2.5 billion that is available to Iraq under the UN arrangement compares with a total of $5 billion spent annually on all civilian purchases made in Iraq before the Gulf war. It is ridiculous for anybody to suggest that the hardship being caused to the Iraqi people by the absence of medical and humanitarian aid is the responsibility of western Governments, because it is not—it is the responsibility of the home Government. I cannot spell that out more strongly or with greater sincerity and fervour.
Iraqi and United Nations representatives are meeting today in New York to discuss implementation of the Security Council resolution. I am not hopeful that they will arrive at a solution, because every time until now the Iraqi Government have turned down the UN offer. Nevertheless, I pray that the Iraqis will see reason on this occasion.
There is an argument that sanctions are not effective, as my hon. Friend the Member for Eastwood implied. I do not believe that that is so. I hold the opinion that in this case, as with the Federal Republic of Yugoslavia in that troubled area, sanctions have been immensely effective. We have seen substantial compliance as a direct result of the sanctions that we have imposed on Iraq. I refer in particular to Iraq's recognition of Kuwait and the weapons inspections that have been allowed. I wish that I could say that that was satisfactory, but it is not. The British Government are not satisfied that all chemical and biological weapons have been destroyed—clearly they have not. Iraq's development of Scud missile technology continues apace, and we have not received any satisfactory explanation from the Iraqi Government of how they will comply with UN requirements—and that is critical in preventing Iraq going on the warpath again.
Iraq's human rights record has been appalling and remains appalling. I refer to the report by Mr. van de Stoel—as my right hon. Friend did in the last debate— of 8 November 1995, in which he set out in graphic and horrific detail the torture and abuse that the Iraqi regime is inflicting on its political prisoners. Therefore, sanctions must be continued, and we must ensure that Iraq complies with the UN resolutions. We cannot look for a swift end to these problems, but it must be made clear that this dictator will not be allowed to rearm his country and go on the warpath once more, as I believe he has every intention of doing. The international community must remain vigilant at all times to contain this man and maintain the sanctions as a warning to him that he must not again invade Kuwait or attack western interests.
I know that my hon. Friend the Member for Eastwood and the hon. Member for Linlithgow have a great and abiding concern about Libya, especially with respect to the Lockerbie disaster. I greatly respect that, and the relatives who suffered from this appalling tragedy are lucky to have a champion such as the hon. Gentleman. For all his good intentions, however, I profoundly disagree with the conclusions that he draws as to the way forward on this issue.
I believe that the sanctions against Libya—unlike those relating to Iraq, they do not include oil—must remain in place. They are limited, but they are having an effect on the Libyan regime. There has been a change in Gaddafi's attitude to actively supporting terrorism over the past few years, and there has been some lessening of his aggression against the west. With regard to the Lockerbie disaster, however, we have not yet reached the point that we must reach—to get the two people whom we want indicted and brought to justice released to us for trial in Scotland.
I recently met the relatives of the victims of the tragedy. I cannot express this evening my sympathy for them any more strongly than I did on those occasions, but it is sincere: I can think of no worse horror befalling any father, mother, family or relative than to have their beloved killed in such a fashion. But sympathy cannot divorce us from the reality of the political situation: we have no possibility of getting those people to trial unless we can persuade or force the Libyan Government to release them to us for trial in the place where they should be tried.
There has been an offer of a sort from the Libyan Government to release the men for trial in a third country. I did not find unanimity among the relatives for that offer. Some thought it was a good one, others did not. In any case, it was a phoney offer. It was made in an advertisement in the Washington Post of 8 November, and it has not been sustained by the Libyan leadership.
The Libyan position is contradictory. In a letter to the president of the Security Council on 27 January this year, the secretary of the General People's Committee for Foreign Liaison and International Co-operation repeated Libya's demand that an
independent inquiry should be conducted to arrive at the truth of the incident".
That is very different from saying that the accused will be delivered for an independent trial at The Hague or elsewhere.
We cannot be sure from one moment to another what the intentions of the Libyan Government may be. I explained to the relatives the reason why we find the


idea of trial in The Hague unacceptable. They were the same as those given by my right hon. Friend the Member for Richmond and Barnes (Mr. Hanley) in the Adjournment debate on 29 November. His main points were that, first, it is unacceptable to allow suspected terrorists to dictate where and how they should be tried. The United States and Scottish courts have both exercised jurisdiction, and they are the courts with a proper right to do so. The trial should be held in one or other of them, as the Security Council resolution has demanded.
Secondly, a third country trial might imply that the Lockerbie suspects could not get a fair trial in Scotland. The Libyan Government indicated in 1993 acceptance that the suspects would indeed get a fair trial if they were tried in Scotland, and I am sure that no Member of this House would suggest otherwise. The court in The Hague, as proposed, would not have a jury, and that in itself is a fundamental breach of the principle of Scottish law. We would have to think very carefully before considering a trial that did not accord with the full precepts that Scottish law demands. There is no provision for a trial outside Scotland. Enormous practical and legislative difficulties would therefore be involved in the arrangement of such a trial, should that be appropriate. Legislation would be required in both countries.
Even if it were possible to set up a court, there would be no guarantee that suspects would be made available to it. The Libyan Government have never given a strong and positive undertaking to hand over the accused; indeed, they have maintained that they have no powers to force the suspects to go to trial anywhere. Thus there is enormous scope for the Libyan Government to prevaricate, and to try to delay the matter into the distant future.
As the hon. Gentleman said, when I was talking to the relatives and trying to convey my profound sympathy for their suffering, I said that they, like Her Majesty's Government, would consider it important for no trial to take place in any form that would not have a proper, legal and justifiable outcome. I said that it would be possible for a court—constituted we know not how or where— to come up with an acquittal that the evidence did not justify. That would not be satisfactory, and I do not believe that any hon. Member would want such an outcome.
Only after years of painstaking effort was sufficient evidence amassed to enable the then Lord Advocate to seek the warrants. The present Lord Advocate and his two predecessors are fully satisfied that the evidence supports

the charges that have been brought. After so much work, it would be a tragedy to undermine the deployment of the evidence before an appropriate and properly constituted court of law that was able to try the case fairly and reach the right conclusion under the law, whatever that conclusion might be. The case is prepared so as to be readily presentable before a Scottish or United States court. That is the way in which it is prepared, and it would not be appropriate to try to deploy it elsewhere—before a tribunal or court whose constitution could not be compatible, under present law, with the way in which such matters are dealt with in Scotland.
The hon. Gentleman mentioned forensic evidence, particularly that relating to the mechanism that was used to detonate the bomb. I can only repeat what has been said in successive answers in the House to the same question: I will not, cannot and should not be drawn into commenting on any of the evidence held by the Scottish authorities that forms part of the prosecution's case. Were I to do so, it would jeopardise the value of the evidence in the trial, which would be in the interest of no one seeking justice.
I confirm again that the forensic examination in the investigation was carried out by the Royal Armaments Research and Development Establishment. The prosecution and investigating authorities are careful not to be drawn into disclosures about the evidence, and stories that hon. Members may have read in books or the media are pure speculation. It is absolutely right for the Government and the prosecuting authorities to rely on the evidence that we have.

Mr. Dalyell: Would the Minister agree to a proper independent investigation by agreed forensic experts?

Sir Nicholas Bonsor: I cannot believe that the hon. Gentleman is suggesting that the Royal Armaments Research and Development Establishment is not either independent or reliable. If he is, I must take the strongest issue with him. I am certainly not prepared to accept such a challenge to that establishment. If he can provide me with the slightest evidence that on occasion its evidence has been challengeable in that way, I will investigate, but I do not believe that it is possible. It is extremely sad that the hon. Gentleman should make such an allegation in the House when I do not believe for a moment that he has any evidence to back it up.

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at eleven minutes to Eleven o'clock.